Exhibit 1
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
XXXXXX ASSOCIATES IV, L.P.
THE INTERESTS OF THIS PARTNERSHIP HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE TRANSFERRED OR
ASSIGNED IN VIOLATION OF THE PROVISIONS THEREOF.
IN ADDITION, TRANSFERS OF THE INTERESTS OF
THIS PARTNERSHIP ARE RESTRICTED AS PROVIDED
IN THIS AGREEMENT.
Dated as of February 7, 2005
TABLE OF CONTENTS
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1. DEFINITIONS.................................................................................. 1
1.1 "Act"............................................................................... 1
1.2 "Agreement"......................................................................... 1
1.3 "Applicable NACCO Class A Closing Price Average".................................... 1
1.4 "Arbitrable Dispute"................................................................ 1
1.5 "Authorized Transferee"............................................................. 2
1.6 "Bankrupt Partner".................................................................. 2
1.7 "Capital Account"................................................................... 2
1.8 "Capital Contributions"............................................................. 2
1.9 "Certificate"....................................................................... 2
1.10 "Charitable Organization"........................................................... 2
1.11 [Intentionally Omitted]............................................................. 3
1.12 "Closing"........................................................................... 3
1.13 "Code".............................................................................. 3
1.14 "Entity"............................................................................ 3
1.15 "Fair Market Value"................................................................. 3
1.16 "Family Beneficiaries".............................................................. 3
1.17 "Family Group"...................................................................... 3
1.18 "Family Group Head"................................................................. 3
1.19 "Family Holder"..................................................................... 3
1.20 "Family Member"..................................................................... 3
1.21 "Final Appraiser"................................................................... 3
1.22 "Final Valuation"................................................................... 3
1.23 "First Appraised Value"............................................................. 3
1.24 "First Appraiser"................................................................... 3
1.25 "Former Partner".................................................................... 4
1.26 "General Partnership Interest"...................................................... 4
1.27 "General Partner"................................................................... 4
1.28 "Independent Appraiser"............................................................. 4
1.29 "Independent Valuation"............................................................. 4
1.30 "Initial Value"..................................................................... 4
1.31 "Limited Partner"................................................................... 4
1.32 "Limited Partnership Interest"...................................................... 5
1.33 "NACCO"............................................................................. 5
1.34 "NACCO Class A Shares".............................................................. 5
1.35 "NACCO Class B Shares".............................................................. 5
1.36 "NACCO Stockholders' Agreement"..................................................... 5
1.37 "NACCO Restated Certificate"........................................................ 5
1.38 "Net Operating Cash Flow"........................................................... 5
1.39 "Net Income" or "Net Loss".......................................................... 5
1.40 "Net Value"......................................................................... 6
1.41 "Objecting Party"................................................................... 6
1.42 "Offered Interests"................................................................. 6
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TABLE OF CONTENTS
(continued)
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1.43 "Original Holders".................................................................. 6
1.44 "Outstanding Remaining Interests"................................................... 6
1.45 "Partner"........................................................................... 6
1.46 "Partner Appraised Value"........................................................... 6
1.47 "Partnership"....................................................................... 6
1.48 "Partnership Interest".............................................................. 6
1.49 "Partnership Percentage"............................................................ 6
1.50 "Partnership Property".............................................................. 8
1.51 "Partnership Valuation"............................................................. 8
1.52 "Person"............................................................................ 8
1.53 "Pledgor Partner"................................................................... 8
1.54 "Proportionate Part"................................................................ 9
1.55 "Predecessor Agreements"............................................................ 9
1.56 "Purchase Price".................................................................... 9
(a) Initial Value.............................................................. 9
(b) Appraised Value............................................................ 9
(c) Valuation Guidelines....................................................... 9
(d) Mutually Agreed Upon Purchase Price........................................ 9
(e) Cooperation with Appraisers................................................ 10
1.57 "Purchase Right".................................................................... 10
1.58 "Qualified Trust"................................................................... 10
1.59 "Remaining Interests"............................................................... 10
1.60 "Repurchase Interests".............................................................. 10
1.61 "Repurchase Notice"................................................................. 10
1.62 "Repurchase Obligation"............................................................. 10
1.63 "Securities Act".................................................................... 10
1.64 "Seller's Notice"................................................................... 10
1.65 "Selling Partner"................................................................... 11
1.66 "Starting Date"..................................................................... 11
1.67 "tax matters partner"............................................................... 11
1.68 "Transfer".......................................................................... 11
1.69 "Transferee"........................................................................ 11
1.70 "Transferor"........................................................................ 11
1.71 "Valuation Notice".................................................................. 11
1.72 "Waived Interest"................................................................... 11
1.73 "Withdrawal Event".................................................................. 11
2. FORMATION, NAME, PURPOSES, POWERS AND TERM................................................... 11
2.1 Formation; Nature of Partnership Interests; Ownership of Partnership
Property............................................................................ 11
2.2 Name and Principal Place of Business................................................ 11
2.3 Purposes and Powers................................................................. 12
2.4 Term................................................................................ 13
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TABLE OF CONTENTS
(continued)
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2.5 Registered Agent.................................................................... 14
3. REPRESENTATIONS AND WARRANTIES............................................................... 14
3.1 Validity of Agreement............................................................... 14
3.2 No Violation of Material Instruments................................................ 15
3.3 Status as a Qualified Trust and Participating Shareholder........................... 15
4. CAPITAL...................................................................................... 15
4.1 Initial Contributions; Tracking of Partnership Percentages.......................... 15
4.2 Additional Contributions............................................................ 16
4.3 Capital Accounts.................................................................... 16
4.4 Allocation of Net Income and Net Loss............................................... 17
4.5 Distributions....................................................................... 17
4.6 No Right to Return of Capital....................................................... 18
5. MANAGEMENT................................................................................... 18
5.1 Management of Partnership Business.................................................. 18
5.2 Management of Partnership Property Consisting of NACCO Class A Shares and
NACCO Class B Shares: Admission of New General Partners............................. 19
5.3 Removal of, and Coordination Among General Partners................................. 20
5.4 Compensation of General Partners.................................................... 20
5.5 Tax Matters......................................................................... 20
5.6 Limitation of Liability............................................................. 21
5.7 Right to Indemnification............................................................ 21
6. BOOKS, AUDITS AND FISCAL MATTERS............................................................. 22
6.1 Partnership Books................................................................... 22
6.2 Fiscal Year......................................................................... 22
7. FORMER PARTNERS.............................................................................. 22
7.1 Status of Former Partners........................................................... 22
7.2 Notice by Former Partner............................................................ 22
7.3 Effect of Withdrawal Events on Voting............................................... 22
7.4 Payment of Interest................................................................. 22
8. TRANSFER OF PARTNERSHIP INTERESTS............................................................ 23
8.1 Securities Laws..................................................................... 23
8.2 Restriction on Transfers............................................................ 23
8.3 Permitted Transfers................................................................. 24
8.4 Purchase Right...................................................................... 24
8.5 Repurchase Obligations to Purchase Partnership Interests............................ 25
8.6 Allocation of Offered Interests / Repurchase Interests.............................. 26
(a) Allocation to Original Holders of Offered Interests........................ 26
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TABLE OF CONTENTS
(continued)
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(b) Allocation among Family Groups............................................. 26
(c) Allocation to the Partnership.............................................. 28
(d) Allocation of Partnership Interests among Family Group Members............. 28
8.7 Terms of Sale........................................................................ 28
8.8 Closing.............................................................................. 29
8.9 Legal Requirements................................................................... 29
8.10 Exceptions........................................................................... 30
9. CODE SECTION 754 ELECTION.................................................................... 30
10. DISSOLUTION.................................................................................. 30
10.1 Dissolution and Termination......................................................... 30
10.2 Limitations On In Kind Distributions................................................ 31
10.3 Continuation of Business............................................................ 31
11. POWER OF ATTORNEY............................................................................ 31
11.1 Grant of Power...................................................................... 31
11.2 Irrevocable Nature.................................................................. 32
11.3 Further Assurances - Power of Attorney.............................................. 32
11.4 Transfer of Partnership Interests................................................... 32
12. GENERAL PROVISIONS........................................................................... 32
12.1 Obtaining Partner Approvals of Partnership Actions.................................. 32
12.2 Arbitration......................................................................... 32
12.3 Notices............................................................................. 33
12.4 Waiver of Right to Partition........................................................ 33
12.5 Binding Effect...................................................................... 33
12.6 Headings............................................................................ 33
12.7 Entire Agreement.................................................................... 33
12.8 Governing Law....................................................................... 33
12.9 Counterparts........................................................................ 33
12.10 Interpretation...................................................................... 34
12.11 Remedies Cumulative................................................................. 34
12.12 Further Assurances.................................................................. 34
12.13 Severability........................................................................ 34
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AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF XXXXXX ASSOCIATES IV, L.P.
THIS AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT is made and
entered into as of the 7th day of February 2005 by and among the Persons
indicated on Schedule A, as amended from time to time, as General Partners, and
the Persons indicated as Limited Partners on Schedule A, as amended from time to
time, as Limited Partners.
RECITALS:
X. Xxxxxx Management, Inc., a Delaware corporation, has assigned its
Partnership Interests (which consisted solely of General Partnership Interests)
to the Persons indicated on Schedule A as General Partners. Xxxxxx Associates
II, L.P., a Delaware limited partnership, has assigned its Partnership Interests
(which consisted solely of Limited Partnership Interests) to the Persons
indicated on Schedule A as Limited Partners.
B. The current Partners of the Partnership wish to amend and restate
the Partnership Agreement of the Partnership, dated as of January 12, 2005, to,
among other things, reflect the current Partners of the Partnership and to
provide for the management of the Partnership by the General Partners.
AGREEMENTS:
In consideration of the mutual promises, covenants and
agreements set forth herein, the Partners hereby agree as follows:
1. DEFINITIONS. The following terms used in this Agreement shall, unless
otherwise expressly provided herein or the context indicates otherwise, have the
meanings set forth below.
1.1 "Act" means the Delaware Revised Uniform Limited Partnership Act as set
forth in Del. Code Xxx. Tit. 6 Sections 17-101 to 17-1111, as the same is
presently in effect and may be hereafter amended.
1.2 "Agreement" means this Amended and Restated Limited Partnership
Agreement, as it may be amended from time to time.
1.3 "Applicable NACCO Class A Closing Price Average" means the average of
the closing prices of the NACCO Class A Shares on the New York Stock Exchange
(or on the principal national securities exchange or automated quotation system
of national securities dealers on which the NACCO Class A Shares may then be
traded) on the five trading dates preceding the relevant Starting Date as
reported in The Wall Street Journal (or, if such periodical is not then
published, the most comparable periodical then being published).
1.4 "Arbitrable Dispute" means any dispute arising under or in connection
with this Agreement.
1.5 "Authorized Transferee" means a Qualified Trust of Xxxxx X. Xxxxxx or
of any member of a Family Group who (A)(i) would be a "Permitted Transferee" of
the Transferring Partner under Article FOURTH, Section 4 of the NACCO Restated
Certificate, if the Transferring Partner were Transferring NACCO Class B Shares
instead of Partnership Interests; and (ii) is eligible to be a Partner of the
Partnership without causing any NACCO Class B Shares then held or thereafter
acquired by the Partnership to be converted into NACCO Class A Shares pursuant
to the provisions of Article FOURTH, Section 4(a)(i)(F) of the NACCO Restated
Certificate; and (iii) is a "Participating Stockholder" under Section 1.12 of
the NACCO Stockholders' Agreement; and (B) unless such Qualified Trust is a
Partner immediately prior to the Transfer of Partnership Interests to such
Qualified Trust, prior to or simultaneously with such Transfer, executes and
delivers to the Partnership a counterpart of this Agreement, executed by the
trustee of such Qualified Trust, agreeing to be subject to the restrictions and
obligations of a Partner hereunder and to hold all Partnership Interests then
owned or later acquired by such Qualified Trust in accordance with the terms of
this Agreement, such counterpart to be substantially in the form of Exhibit 1.
1.6 "Bankrupt Partner" means any Partner who, or whose settlor or any of
whose beneficiaries (a) makes an assignment for the benefit of creditors; (b)
files a voluntary petition in bankruptcy; (c) is adjudged a bankrupt or
insolvent, or has entered against him an order for relief in any bankruptcy or
insolvency proceeding; (d) files a petition or answer seeking for himself any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any statute, law or regulation; (e) files an answer or
other pleading admitting or failing to contest the material allegations of a
petition filed against him in any proceeding of this nature; or (f) seeks,
consents to or acquiesces in the appointment of a trustee (other than the
trustee of a Qualified Trust), receiver or liquidator of such Person or of all
or any substantial part of his properties. A Bankrupt Partner shall cease to be
a Partner, and shall become a Former Partner, immediately prior to the earliest
to occur of any event causing such Partner to become a Bankrupt Partner.
1.7 "Capital Account" means, with respect to any Partner, the Capital
Account established for such Partner pursuant to Section 4.3.
1.8 "Capital Contributions" means, with respect to any Partner, the amount
of cash and promissory notes and the Fair Market Value of any property (other
than cash), as determined by agreement of the Partners, by independent
appraisal, or as otherwise provided in this Agreement, contributed from time to
time to the Partnership by (i) such Partner, (ii) any transferor of a Partner
prior to the date hereof or (iii) any Transferor of such Partner after the date
hereof.
1.9 "Certificate" means the Certificate of Limited Partnership of the
Partnership required by Section 17-201 of the Act, as amended hereafter from
time to time as required by the Act.
1.10 "Charitable Organization" means any organization contributions to
which are deductible for federal income, estate or gift tax purposes.
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1.11 [Intentionally Omitted].
1.12 "Closing" has the meaning set forth in Section 8.8(a).
1.13 "Code" means the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder. References to specific sections of the Code
shall be deemed to include references to corresponding provisions of any
succeeding internal revenue law of the United States of America and any
regulations thereunder.
1.14 "Entity" means any general partnership, limited partnership,
corporation, limited liability company, joint venture, estate, trust, business
trust, association or other entity.
1.15 "Fair Market Value" means the price at which the property being valued
would change hands between a willing buyer and a willing seller, neither being
under any compulsion to buy or to sell and both having reasonable knowledge of
the relevant facts.
1.16 "Family Beneficiaries" means (i) Xxxxx X. Xxxxxx; (ii) the lineal
descendants of Xxxxx X. Xxxxxx; and (iii) the spouse or surviving spouse of any
lineal descendant of Xxxxx X. Xxxxxx. For purposes of this Section 1.16, the
relationship of any person that is derived by or through legal adoption prior to
age 18 shall be considered a natural one.
1.17 "Family Group" means a Family Group Head and his Family Members so
long as a Qualified Trust of such Family Group Head or of any of his Family
Members owns any Partnership Interests.
1.18 "Family Group Head" means each of Xxxxxx X. Xxxxxx, Xx., Xxxxx X.
Xxxxxx, Xxxxxxxxx X. Xxxxxx, Xxxxx X. Xxxxxx and Xxxxxx X. Xxxxxx.
1.19 "Family Holder" means a Partner (other than a Former Partner) who is,
and only so long as such Partner is, a Qualified Trust of a member of a Family
Group. For purposes of Sections 8.4, 8.5 and 8.6, a Qualified Trust that is a
Family Holder will be deemed to be a member of the Family Group to which the
Qualified Trust's settlor belongs.
1.20 "Family Member" means any lineal descendant of a Family Group Head who
is not more remote than a grandchild of Xxxxx X. Xxxxxx.
1.21 "Final Appraiser" has the meaning set forth in Section 1.56(b).
1.22 "Final Valuation" has the meaning set forth in Section 1.56(b).
1.23 "First Appraised Value" has the meaning set forth in Section 1.56(b).
1.24 "First Appraiser" has the meaning set forth in Section 1.56(b).
3
1.25 "Former Partner" means (i) a Partner that has ceased to be a Qualified
Trust, and has become a Former Partner, pursuant to the terms of Section 1.58;
(ii) a Partner who has become a Bankrupt Partner and a Former Partner, pursuant
to the terms of Section 1.6; (iii) a Partner who has become a Pledgor Partner
and a Former Partner, pursuant to the terms of Section 1.53; and (iv) a Partner
who ceases to be a "Participating Stockholder" under Section 1.12 of the NACCO
Stockholders' Agreement.
1.26 "General Partnership Interest" means any Partnership Interest which is
directly traceable to and is derived from (i) a capital contribution to the
Partnership for an interest in the Partnership as a General Partner, (ii) the
assignment by Xxxxxx Management, Inc. to the General Partners indicated on
Schedule A of General Partnership Interests, or (iii) a Transfer of a General
Partnership Interest after the date hereof and permitted by this Agreement. The
holder of a General Partnership Interest (other than a Former Partner) shall
have all of the rights and obligations of a General Partner under this Agreement
to the extent such Person's Partnership Interests constitute General Partnership
Interests.
1.27 "General Partner" means each of the Persons identified on Schedule A
as a General Partner (to the extent that each such Person holds a General
Partnership Interest), and any additional General Partners admitted pursuant to
the terms of this Agreement (including, with limitation, pursuant to compliance
with Section 5.2(d)) and their respective Transferees as permitted by this
Agreement (including, without limitation, pursuant to compliance with Section
5.2(d)). Any Transferee of a General Partnership Interest who is admitted as a
Partner pursuant to this Agreement (including, without limitation, pursuant to
compliance with Section 5.2(d)) shall become a General Partner to the extent
that such Transferee holds General Partnership Interests. A Partner may own both
Limited Partnership Interests and General Partnership Interests. A Partner's
acquisition of a General Partnership Interest shall not convert such Partner's
Limited Partnership Interests into General Partnership Interests. A Partner's
acquisition of a Limited Partnership Interest shall not convert such Partner's
General Partnership Interests into Limited Partnership Interests.
Notwithstanding the foregoing, the term "General Partner" shall not include any
Former Partner.
1.28 "Independent Appraiser" means a Person who (a) is qualified to
appraise the Partnership Interest or other property in question, (b) has at
least five (5) years of appraisal experience and (c) is not a descendant of any
grandparent of Xxxxx X. Xxxxxx or the spouse of any such descendant. For the
purposes of this Section 1.28, the relationship of any person that is derived by
or through legal adoption shall be considered a natural one.
1.29 "Independent Valuation" has the meaning set forth in Section 1.49(d).
1.30 "Initial Value" has meaning set forth in Section 1.56(a).
1.31 "Limited Partner" means each of the Persons identified on Schedule A
as a Limited Partner (to the extent that each such Person holds a Limited
Partnership Interest), any additional Limited Partners admitted pursuant to the
terms of this Agreement, and their respective Transferees as permitted by this
Agreement. Any Transferee of a Limited Partnership Interest who is admitted as a
Partner pursuant to this Agreement shall become a Limited Partner
4
to the extent that such Transferee holds Limited Partnership Interests.
Notwithstanding the foregoing, the term "Limited Partner" shall not include any
Former Partner.
1.32 "Limited Partnership Interest" means any Partnership Interest
which is directly traceable to and is derived from (i) a capital contribution to
the Partnership for an interest in the Partnership as a Limited Partner, (ii) a
transfer of a Limited Partnership Interest prior to the date hereof and
reflected on Schedule A, or (ii) a Transfer of a Limited Partnership Interest
after the date hereof and permitted by this Agreement. The holder of a Limited
Partnership Interest (other than a Former Partner) shall have all of the rights
and obligations of a Limited Partner under this Agreement to the extent such
Person's Partnership Interests constitute Limited Partnership Interests.
1.33 "NACCO" means NACCO Industries, Inc., a Delaware corporation.
1.34 "NACCO Class A Shares" means shares of Class A Common Stock, par value
$1.00 per share, of NACCO.
1.35 "NACCO Class B Shares" means shares of Class B Common Stock, par value
$1.00 per share, of NACCO.
1.36 "NACCO Stockholders' Agreement" means the Stockholders' Agreement,
dated as of March 15, 1990, as amended, by and among NACCO and National City
Bank, (Cleveland, Ohio), as depository, and the Participating Stockholders (as
such term is defined therein), as amended from time to time.
1.37 "NACCO Restated Certificate" means the Restated Certificate of
Incorporation of NACCO, filed with the Secretary of State of the State of
Delaware on June 1, 1987 as hereafter amended from time to time. References to
specific sections of the NACCO Restated Certificate shall be deemed to include
references to provisions addressing the same or similar subject matter of any
amendment or amendment and restatement of the NACCO Restated Certificate that
becomes effective after the date hereof.
1.38 "Net Operating Cash Flow" means the net cash flow to the Partnership
resulting from ownership and operation of the Partnership Property, plus any
other items of income received in cash by the Partnership less (i) all debts and
expenses paid in the operation of the Partnership, (ii) any reserves which the
General Partners deem reasonably necessary for the operation of the Partnership
or for the satisfaction of obligations of the Partnership pursuant to Section
8.5, and (iii) all proceeds which are (A) received by the Partnership from the
Transfer of Partnership Property, and (B) used to purchase or reserved, as
determined by the General Partners in furtherance of their fiduciary duties
hereunder and under the Act, for the purchase of other Partnership Property.
1.39 "Net Income" or "Net Loss" means the net income or net loss (as
appropriate) of the Partnership for a particular calendar year or interim period
of less than twelve (12) complete months, as determined in accordance with
accounting principles consistently applied on a cash basis (unless applicable
laws shall require use of the accrual method). Such determination shall
5
include, without limitation, depreciation, amortization, accelerated cost
recovery, and other deductions or credits against tax allowed by the Code. Net
Income or Net Loss is a financial accounting concept and, to the extent of
changes in value following any in kind Capital Contribution, is also intended to
be a tax accounting concept (to the maximum extent that financial and tax
accounting concepts may overlap). The determination of Net Income or Net Loss
shall not take into account special allocations required by Section 704(c) of
the Code with respect to any in kind Capital Contribution.
1.40 "Net Value" has the meaning set forth in Section 1.49(a)(ii).
1.41 "Objecting Party" shall have the meaning set forth in Section 1.56(a).
1.42 "Offered Interests" has the meaning set forth in Section 8.4(a).
1.43 "Original Holders" has the meaning set forth in Section 8.6(a).
1.44 "Outstanding Remaining Interests" has the meaning set forth in Section
8.6(b)(iii).
1.45 "Partner" means any General Partner and any Limited Partner.
1.46 "Partner Appraised Value" has the meaning set forth in Section
1.49(c).
1.47 "Partnership" means XXXXXX ASSOCIATES IV, L.P., a limited partnership
organized under the provisions of the Act and the laws of the State of Delaware
and any successor partnership continuing the business of XXXXXX ASSOCIATES IV,
L.P. pursuant to this Agreement.
1.48 "Partnership Interest" means the percentage ownership share of each
Partner in the capital of the Partnership, whether as a Limited Partner or as a
General Partner, which percentage at any particular time shall be deemed to
equal the percentage which such Partner's Capital Account balance (if positive)
bears to the sum of all positive Capital Account balances of the Partners at
such time. In the event that a Partner's Capital Account balance is zero or is a
negative number, such Partner's Partnership Interest shall be deemed to be zero.
1.49 "Partnership Percentage" means the percentage share of each Partner in
the Net Income or Net Loss of the Partnership. The Partners' initial Partnership
Percentages were proportionate to the Partners' initial Capital Contributions to
the Partnership. The Partners acknowledge and agree that Schedule A accurately
reflects the identity of each Partner and the nature and amount of each
Partner's Partnership Percentage as of the date of this Agreement. Hereafter,
subject to Section 1.49(g), such Partnership Percentages shall be adjusted only
to reflect a disproportionate Capital Contribution by one or more Partners or a
disproportionate distribution to one or more Partners, with disproportion being
determined in accordance with Sections 4.2(a) and 4.5(b), except as set forth in
subsection (f) of this Section 1.49.
(a) Such adjustments shall be made based upon the Partnership
Percentages determined as set forth below (whether such determination is made by
the General Partners in
6
determining the Partnership Valuation, an Objecting Partner and an Independent
Appraiser in determining the Partner Appraised Value, or a second Independent
Appraiser in determining the Independent Valuation):
(i) First, the Fair Market Value of the Partnership
Property immediately before the disproportionate Capital Contribution
or distribution will be determined;
(ii) Second, the difference between the aggregate value of
the Partnership Property and the total of the Partnership debt (the
"Net Value") will be allocated among the Partners in proportion to the
Partnership Percentages in effect immediately before the
disproportionate Capital Contribution or distribution;
(iii) Third, each Partner's Capital Contribution at the
time of the disproportionate Capital Contribution will be added to, and
each Partner's distribution at the time of the disproportionate
distribution will be subtracted from, that Partner's allocable share of
the Net Value of the Partnership Property immediately before the
disproportionate Capital Contribution or distribution; and
(iv) Finally, each Partner's sum or difference determined
under (iii), above, will be expressed as a percentage of the aggregate
sums or differences of all Partners determined under (iii), above.
(b) The General Partners owning more than seventy five
percent (75%) of the General Partnership Interests, based upon such
considerations as they, in their sole discretion, determine to be relevant to
such valuation, shall determine the Fair Market Value of the Partnership
Property and the resulting Partnership Percentages pursuant to subsection (a) of
this Section 1.49 (such valuation and resulting Partnership Percentages being
hereafter referred to as the "Partnership Valuation").
(c) If a Partner objects in writing to the Partnership
Valuation, such Partner may, at his sole cost and expense and within fourteen
(14) days from the date of such written objection, engage an Independent
Appraiser to determine within thirty (30) days of such appointment the Fair
Market Value of the Partnership Property and the resulting Partnership
Percentages in accordance with subsection (a) of this Section 1.49 (the "Partner
Appraised Value"). If the Partner Appraised Value is at least eighty percent
(80%) of the Partnership Valuation and less than or equal to one hundred twenty
percent (120%) of the Partnership Valuation, then the Partnership Percentages
shall be based upon the average of the Partnership Valuation and the Partner
Appraised Value.
(d) If the Partner Appraised Value is less than eighty
percent (80%) of the Partnership Valuation or more than one hundred twenty
percent (120%) of the Partnership Valuation, then the General Partners holding
more than seventy five percent (75%) of the General Partnership Interests and
the Partner(s) objecting to the Partnership Valuation shall, within fourteen
(14) days from the date of the Partner Appraised Value, mutually agree on a
second Independent Appraiser. The cost of the second Independent Appraiser shall
be borne equally by the Partnership and the Partner(s) objecting to the
Partnership Valuation. The second
7
Independent Appraiser shall determine within fourteen (14) days after its
appointment the Fair Market Value of the Partnership Property and the resulting
Partnership Percentages pursuant to subsection (a) of this Section 1.49 (such
valuation and resulting Partnership Percentages being hereafter referred to as
the "Independent Valuation"), but such Independent Valuation shall be not less
than the smaller of the Partnership Valuation and the Partner Appraised Value
nor greater than the larger of the Partnership Valuation and the Partner
Appraised Value. The Independent Valuation as so determined shall be binding
upon the Partnership and each of the Partners.
(e) The Partnership shall cooperate in assisting the appraisers in
conducting the foregoing appraisals, including providing reasonable access to
the books and records of the Partnership and to such other information as the
appraisers reasonably request in connection with such determinations; provided,
however, that nothing in this Agreement shall require the Partnership to
disclose privileged or proprietary information; and provided, further, that the
Partnership may require such appraisers to enter into such confidentiality and
non-disclosure agreements as the General Partners reasonably believe to be
necessary to protect the interests of the Partnership and its Partners.
(f) The General Partners may establish disproportionate monthly or
other periodic draws during the calendar year but any such disproportionate
draws shall not be regarded as disproportionate distributions if compensating
distributions, determined with or without interest, in the discretion of the
General Partners, are made by the end of March of the following calendar year so
that the periodic draws and compensating distributions in the aggregate are
proportionate.
(g) A Transferee of a Partner shall succeed to that portion of the
Transferor's Partnership Percentage which is Transferred to that Transferee.
1.50 "Partnership Property" means any property, real, personal or mixed, or
any interest therein or appurtenant thereto which may be owned or acquired by
the Partnership.
1.51 "Partnership Valuation" has the meaning set forth in Section 1.49(b).
1.52 "Person" means any individual or Entity.
1.53 "Pledgor Partner" means (i) any Partner who, or whose settlor or any
of whose beneficiaries, attempts to pledge or grant a security interest, lien or
other encumbrance in or against, any or all of the Partner's Partnership
Interest other than to an Authorized Transferee or (ii) the holder of any
Partnership Interest against which a court has charged or placed a lien against
or appointed a receiver or ordered a foreclosure for the benefit of a judgment
creditor of such Partner or its settlor or any of its beneficiaries, which
judgment creditor is not an Authorized Transferee. A Pledgor Partner shall cease
to be a Partner, and shall become a Former Partner, immediately prior to the
earliest to occur of any events causing such Partner to become a Pledgor
Partner.
8
1.54 "Proportionate Part" means, with respect to any Partner or Family
Holders' Family Group, the Partnership Percentage of such Partner or the
aggregate Partnership Percentage of such Family Holders' Family Group.
1.55 [Intentionally Omitted].
1.56 "Purchase Price" means the Fair Market Value of the Offered Interests
or Repurchase Interests, as the case may be, determined as follows:
(a) Initial Value. The General Partners holding more than seventy five
percent (75%) of the General Partnership Interests shall from time to time
determine a value for the Partnership Interests (the "Initial Value") based upon
such considerations as they, in their sole discretion, determine to be relevant
to such valuation. If a Selling Partner or Former Partner (for purposes of this
Section 1.56, the "Objecting Party") does not provide a written objection to the
Partnership concerning the Initial Value set forth in the Valuation Notice
within ten (10) days after the date of such Valuation Notice, the Purchase Price
shall be equal to the Initial Value.
(b) Appraised Value. If an Objecting Party objects in writing to the
Initial Valuation within ten (10) days after its receipt of the Valuation
Notice, the Objecting Party, within fourteen (14) days from the date of such
written objection, shall engage an Independent Appraiser (the "First Appraiser")
to determine within thirty (30) days of such appointment the Fair Market Value
of the Partnership Interests (the "First Appraised Value"). The cost of the
First Appraiser shall be borne by the Objecting Party. If the First Appraised
Value is at least eighty percent (80%) of the Initial Value and less than or
equal to one hundred twenty percent (120%) of the Initial Value, then the
Purchase Price shall be the average of the Initial Value and the First Appraised
Value. If the First Appraised Value is less than eighty percent (80%) of the
Initial Value or more than one hundred twenty percent (120%) of the Initial
Value, then the Partnership and the Objecting Party shall, within fourteen (14)
days from the date of the First Appraised Value, mutually agree on a second
Independent Appraiser (the "Final Appraiser"). The cost of the Final Appraiser
shall be borne equally by the Partnership and the Objecting Party. The Final
Appraiser shall determine within fourteen (14) days after its appointment the
Fair Market Value of the Partnership Interests (the "Final Valuation"), but such
Final Valuation shall be not less than the smaller of the Initial Value and the
First Appraised Value nor greater than the larger of the Initial Value and the
First Appraised Value. The Purchase Price shall be equal to the Final Valuation
and shall be final and binding upon the parties to this Agreement for purposes
of the subject transaction.
(c) Valuation Guidelines. The Initial Value, First Appraised Value, and
Final Valuation shall be based upon the Fair Market Value of the Partnership
Interests comprising the Offered Interests or Repurchase Interests. In
determining such Fair Market Value, the General Partners and Independent
Appraisers, as applicable, shall determine appropriate discounts for lack of
marketability and lack of control without regard to any market for such
Partnership Interest arguably resulting from Section 8.4 or 8.5.
(d) Mutually Agreed Upon Purchase Price. Notwithstanding the procedure
set forth above, the Partnership and an Objecting Party may, prior to or at any
time during the
9
appraisal process, mutually agree on a single independent appraiser to determine
the Purchase Price, which determination shall be binding on all of the parties,
or may agree in writing upon a Purchase Price.
(e) Cooperation with Appraisers. The Partnership shall cooperate in
assisting the appraisers in determining the Purchase Price, including providing
reasonable access to the books and records of the Partnership and to such other
information as the appraisers reasonably request in connection with such
determination; provided, however, that nothing in this Agreement shall require
the Partnership to disclose privileged or proprietary information; and provided
further, that the Partnership may require such appraisers to enter into such
confidentiality and non-disclosure agreements as the General Partners reasonably
believe to be necessary to protect the interests of the Partnership and its
Partners.
1.57 "Purchase Right" has the meaning set forth in Section 8.4.
1.58 "Qualified Trust" of any individual means any trust (including,
without limitation, a voting trust) established by such individual if and as
long as the trust is held for the benefit of one or more Family Beneficiaries
and any Charitable Organizations and for the benefit of no other Person;
provided that such trust may grant a general or special power of appointment to
such individual or such individual's spouse and may permit trust assets to be
used to pay taxes, legacies and other obligations of the trust or the estate of
such individual or such individual's spouse payable by reason of the death of
such individual or such individual's spouse; and; provided further that such
trust must prohibit (A) the transfer of NACCO Class B Shares to any Person other
than a Permitted Transferee of such trust as defined in Section 4 of the NACCO
Restated Certificate and (B) the Transfer of Partnership Interests to any Person
other than to Authorized Transferees of such trust. The restrictions in
subclause (B) of the prior sentence shall not be interpreted to restrict a
beneficiary who is a member of a Family Group from directing that any
Partnership Interests to which he or she is otherwise entitled to receive under
such trust be instead transferred to one or more other Qualified Trusts that are
Authorized Transferees of the trust at issue. Notwithstanding anything to the
contrary contained herein, a trust of Xxxxx X. Xxxxxx or any other individual
shall cease to be a Qualified Trust and shall be deemed, to the extent it holds
Partnership Interests, to become a Former Partner, immediately prior to any
event or lapse of time which causes such trust to no longer qualify as a
Qualified Trust as defined in this Section 1.58.
1.59 "Remaining Interests" has the meaning set forth in Section 8.6(b).
1.60 "Repurchase Interests" has the meaning set forth in Section 8.5.
1.61 "Repurchase Notice" has the meaning set forth in Section 8.5(a).
1.62 "Repurchase Obligation" has the meaning set forth in Section 8.5.
1.63 "Securities Act" has the meaning set forth in Section 8.1.
1.64 "Seller's Notice" has the meaning set forth in Section 8.4(a).
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1.65 "Selling Partner" has the meaning set forth in Section 8.4.
1.66 "Starting Date" means, with respect to any Seller's Notice or
Repurchase Notice, the date of the determination of the Purchase Price pursuant
to Section 1.56 relating to such notice.
1.67 "Tax Matters Partner" has the meaning set forth in Section 5.5.
1.68 "Transfer" means any sale, lease, exchange, assignment, pledge,
hypothecation, encumbrance, disposition, transfer (including, without
limitation, a transfer by will or intestate distribution), gift or attempt to
create or grant a security interest in Partnership Interests, whether voluntary,
involuntary, by operation of law or otherwise.
1.69 "Transferee" means a Person (other than a Former Partner) to whom
Partnership Interests have been Transferred in accordance with the provisions of
this Agreement.
1.70 "Transferor" means any Partner who has Transferred all or a portion of
his Partnership Interests in accordance with the provisions of this Agreement.
1.71 "Valuation Notice" means the notice given by the Partnership pursuant
to Section 8.4(b) or 8.5(a) and stating the Initial Value at which a Purchase
Right is to be exercised or at which a Repurchase Obligation is to be effected.
1.72 "Waived Interest" has the meaning set forth in Section 8.4(g).
1.73 "Withdrawal Event" means the earliest to occur of any event which
causes a Partner to cease to be a Partner, and to become a Former Partner, as
set forth in Section 1.25.
2. FORMATION, NAME, PURPOSES, POWERS AND TERM.
2.1 Formation; Nature of Partnership Interests; Ownership of Partnership
Property.
(a) The Partnership was formed on January 12, 2005 as a limited
partnership organized pursuant to the provisions of the Act and the laws of the
State of Delaware.
(b) Each Partner's Partnership Interest shall be personal property for
all purposes.
(c) All Partnership Property shall be deemed owned by the Partnership
as an Entity, and no Partner or Former Partner, individually, shall have a
direct ownership interest in any Partnership Property.
2.2 Name and Principal Place of Business. The Partnership shall do
business under the name "XXXXXX ASSOCIATES IV, L.P." The principal place of
business of the Partnership shall be 0000 Xxxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxx
Xxxxxxx, Xxxx 00000-0000, or such other
11
place as the General Partners may from time to time determine. The General
Partners shall execute any assumed or fictitious name certificate(s) required by
law in connection with the formation or operation of the Partnership and shall
file the same in the appropriate public records.
2.3 Purposes and Powers.
(a) The character of business and purpose of the Partnership is to
invest, acquire, sell, hold, own, develop, improve, maintain, mortgage, manage,
lease and operate the Partnership Property and to conduct all other business
related or incident thereto. In particular, the Partnership is initially
designed as a vehicle for consolidating the management of the Partnership
Property, providing for the succession of such management, and enhancing total
returns from the Partnership Property.
(b) In furtherance of the above-stated purposes and subject to any
restrictions contained in this Agreement (including, but not limited to, the
restrictions contained in Sections 5.1 and 5.2), the Partnership, by the action
of any of the General Partners, shall have the power to:
(i) enter into a contract for the purchase or sale of any of the
Partnership Property.
(ii) execute all documents or instruments of any kind appropriate
for carrying out the purposes of the Partnership, including, without
limitation, investment management, management, purchase, debt and
security agreements.
(iii) open and maintain one or more depository accounts, including
money market accounts and margin accounts, in the name of the
Partnership.
(iv) employ such personnel and obtain such management services
and/or such investment management, legal, accounting and other
professional services and advice as the General Partners deem advisable
in the course of the Partnership's operations under this Agreement,
including the services of any party who, directly or beneficially, is a
Partner or a spouse or descendant of a Partner, and pay reasonable fees
for such services.
(v) pay all real estate and ad valorem taxes and other
governmental charges levied or assessed against the Partnership
Property, and all other taxes (other than income taxes of the Partners
and Former Partners except to the extent that the Partnership may be
obligated to withhold therefor) directly relating to the Partnership's
operations under this Agreement.
(vi) borrow money from banks and other lending institutions or
from other third parties or from any of the Partners for Partnership
purposes and pledge or otherwise grant security interests in the
Partnership Property for the repayment of such loans.
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(vii) take any of the Partnership Property subject to a loan or
assume a loan secured by any of the Partnership Property irrespective
of whether such outstanding loan is from a lending institution or other
third party or from one or more of the Partners.
(viii) deliver, on behalf of the Partnership, all notices and
closing deliveries required by Section 8 to be delivered by the
Partnership in connection with any Transfer of Partnership Interests or
Repurchase Obligation in accordance with the terms of this Agreement.
(ix) perform any and all other acts or activities customary,
incidental, necessary or convenient to the purposes and powers
enumerated herein.
(c) Nothing in this Agreement shall, or shall be deemed to, restrict in
any way the freedom of any Partner (directly or through an affiliate) to conduct
any other business or activity whatsoever (including, without limitation, the
acquisition, development, leasing, sale, operation and management of other real
property), without any accountability to the Partnership or any other Partner,
even if such business or activity competes with the business of the Partnership,
it being understood by each Partner that the other Partners or affiliates
thereof may be interested, directly or indirectly, in various other businesses
and undertakings not included in the Partnership.
2.4 Term. The Partnership shall have a perpetual existence.
2.5 Registered Agent. The name of the Partnership's initial agent for
service of process on the Partnership in the State of Delaware shall be
Corporation Service Company, and the address of the initial registered office
and the initial registered agent shall be 0000 Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxx
xx Xxx Xxxxxx, Xxxxxxxx 00000. As required by the Act, the Partnership shall at
all times maintain in the State of Delaware an office and an agent for service
of process selected by the General Partners in accordance with any relevant
provisions of the Act.
3. REPRESENTATIONS AND WARRANTIES. Each Partner, in order to induce the other
Partners to enter into this Agreement, hereby represents and warrants to the
other Partners that:
3.1 Validity of Agreement. This Agreement, and each and every other
agreement, document and instrument provided for herein and to which such Partner
is or shall be a party, when executed and delivered, shall constitute the valid
and binding obligation of such Partner, enforceable against such Partner in
accordance with its terms, except as enforceability may be limited by (a)
bankruptcy or similar laws from time to time in effect affecting the enforcement
of creditors' rights generally or (b) the availability of equitable remedies
generally.
3.2 No Violation of Material Instruments. The execution and delivery of
this Agreement by such Partner does not, and the consummation of the
transactions contemplated hereby shall not:
13
(a) violate or constitute an occurrence of default (which violation or
default either singularly or in the aggregate would be considered material)
under any provision of, or conflict with, or result in acceleration of any
obligation under, or give rise to a right by any party to terminate its
obligations under any material agreement, instrument, order, judgment, decree or
other arrangement to which such Partner is a party or by which he is bound or
his assets affected; or
(b) require any consent, approval, filing or notice under any provision
of law, or violate any judgment, ruling, order, writ, injunction, decree,
statute, rule or regulation applicable to such Partner.
3.3 Status as a Qualified Trust and "Participating Stockholder". As of the
date of this Agreement, (i) such Partner is a Qualified Trust of Xxxxx X. Xxxxxx
or a member of a Family Group and no event has occurred that would cause such
Partner to become a Former Partner and (ii) such Partner is a "Participating
Stockholder" under Section 1.12 of the NACCO Stockholders' Agreement and no
event has occurred that would cause such Partner, upon the lapse of time or the
receipt of notice, or both, to cease to be a "Participating Stockholder" under
Section 1.12 of the NACCO Stockholders' Agreement. As of the date on which any
Authorized Transferee becomes a Partner, such Partner shall be deemed to make
the representations contained in the preceding sentence.
4. CAPITAL
4.1 Initial Contributions; Tracking of Partnership Percentages. (a) The
Partners or their transferors have contributed various properties to the
Partnership as their respective initial Capital Contributions. The initial
Partnership Interests and Partnership Percentages were proportional to the Fair
Market Values of the Partners' or their transferors', as the case may be,
respective Capital Contributions, without regard to whether such Capital
Contributions were for an interest as a General Partner, Limited Partner, or
both.
(b) The General Partners shall at all times maintain a current list of
the Partnership Percentages of all Partners. Such list shall be attached to this
Agreement as Schedule A. The Partners acknowledge and agree that Schedule A
accurately reflects, as of the date of this Agreement, the identity of each
Partner, the Partnership Percentage of each Partner and the extent to which such
Partnership Percentages represent General Partnership Interests or Limited
Partnership Interests.
4.2 Additional Contributions. (a) In addition to the Capital Contributions
made by the Partners pursuant to Section 4.1 hereof, and subject to the
limitations on any requirement that a Partner make additional Capital
Contributions (as provided in Section 4.2(b)), the Partners may, from time to
time, make such additional Capital Contributions as may be necessary or
desirable in the discretion of the General Partners; provided, however, that any
property contributed to the Partnership under this Section 4.2(a) shall be
transferred subject to any and all existing liabilities encumbering such
contributed property, and the Partnership shall take and hold the contributed
property subject to such existing liabilities but shall not assume such
liabilities unless Partners owning more than fifty percent (50%) of the
Partnership Interests
14
consent in writing to any such assumption. In the event the net values of the
additional Capital Contributions shall be disproportionate to the Partners'
Partnership Percentages immediately before the additional Capital Contributions,
then the Partnership Percentages shall be adjusted as provided in Section 1.49
to reflect the disproportionate additional Capital Contributions.
(b) Under no circumstances shall a Limited Partner be personally
liable for any of the debts or obligations of the Partnership by reason of such
Person's status as a Limited Partner. No Limited Partner shall be required, by
reason of such Person's status as a Limited Partner, to contribute any capital
to the Partnership except as provided in Section 4.1.
4.3 Capital Accounts.
(a) An individual Capital Account shall be established and maintained
for each Partner in accordance with the requirements of the Code and shall be
credited with the Capital Contribution of such Partner (or such Partner's
Transferor) and that portion of Net Income allocable to such Partner, and shall
be debited with that portion of any Net Loss allocable to such Partner and all
distributions made by the Partnership to such Partner. A Transferee shall
succeed to an allocable portion of the Capital Account of the Transferor which
is Transferred to such Transferee, and the Capital Account of the Transferor
shall be reduced by a corresponding amount. If the Partner is both a General
Partner and a Limited Partner, subaccounts shall be maintained to reflect the
Person's interest as a General Partner and as a Limited Partner.
(b) No interest shall be payable to any Partner on any positive
balance in such Partner's Capital Account.
(c) Except as provided in this Agreement, no Partner shall have the
right to withdraw from his Capital Account or to otherwise receive any
Partnership funds or Partnership Property. As provided in Section 12.4, each
Partner expressly waives any right to partition the Partnership Property which
he may otherwise have.
(d) A Partner shall be required to eliminate in any fashion approved in
good faith by the General Partners any deficit balance which may arise in that
Partner's Capital Account, at the time the Partnership is dissolved or at any
other time, provided, however, that no Limited Partner shall be required, by
reason of such Person's status as a Limited Partner, to contribute any capital
to the Partnership except as provided in Section 4.1. If a Limited Partner
unexpectedly receives an adjustment, allocation or distribution described in
(4), (5) or (6) of Section 1.704-1(b)(2)(ii)(d) of the regulations issued under
Section 704(b) of the Code, gross income of the Partnership or gain from a sale
of assets shall be allocated to such Limited Partner in an amount sufficient to
eliminate any deficit balance in such Limited Partner's Capital Account caused
by such adjustment, allocation or distribution as quickly as possible to the
extent such deficit balance exceeds the amount such Limited Partner is deemed
obligated to restore to the Partnership pursuant to the Section 704(b)
regulations. It is the intent of the Partners that any allocation pursuant to
this Section 4.3(d) constitutes a "qualified income offset" under Treasury
regulation Section 1.704-1(b)(2)(ii)(d).
15
4.4 Allocation of Net Income and Net Loss. Net Income or Net Loss of
the Partnership shall be determined as of the end of each calendar year and as
of the end of any interim period extending through the day immediately preceding
any (i) disproportionate Capital Contribution, (ii) disproportionate
distribution, (iii) Transfer of a Partnership Interest in accordance with the
terms of this Agreement, or (iv) Withdrawal Event. If a calendar year includes
an interim period, the determination of Net Income or Net Loss for the period
extending through the last day of the calendar year shall include only that
period of less than twelve (12) months occurring from the day immediately
following the last day of the latest interim period during the calendar year and
extending through the last day of the calendar year. For all purposes, including
income tax purposes, Net Income, if any, of the Partnership for each calendar
year or interim period shall be allocated among the Partners in proportion to
their respective Partnership Percentages for the calendar year or interim
period. In the event of a Net Loss for a particular calendar year or interim
period, then, for such calendar year or interim period, the Net Loss for such
calendar year or interim period shall be allocated among the Partners in
proportion to their respective Partnership Percentages for the calendar year or
interim period.
4.5 Distributions.
(a) The Partnership must distribute annually among the Partners an
amount equal to the greater of (i) Net Operating Cash Flow, or (ii) an amount
corresponding to the income tax liabilities of the Partners resulting from the
allocation of Net Income (as such amount shall be determined in good faith by
the General Partners by assuming that all Partners are in the highest marginal
federal income tax bracket and by using the highest marginal income tax rates
for the state of residence of the Partner with the highest marginal state income
tax rates). The Partnership shall make such distributions from time to time
during each year as the General Partners determine, provided that the
Partnership must distribute quarterly at least fifteen (15) days in advance of
the dates on which estimated tax payments are due at least an amount
corresponding to the income tax liabilities of the Partners resulting from the
allocation of Net Income (as determined as provided in the preceding sentence).
(b) All distributions shall be made in proportion to the Partners'
respective Partnership Percentages except (i) when the General Partners approve
the disproportionate distribution, or (ii) with respect to any payment of NACCO
Class A Shares by the Partnership pursuant to Section 7.4 or 8.7(a). The General
Partners are encouraged to consider disproportionate distributions to defray the
income tax liabilities resulting from special allocations under Section 704(c)
of the Code, but such disproportionate distributions shall not be required.
Subject to Section 4.5(a) of this Agreement, the General Partners are expressly
authorized to make monthly or other periodic draws with respect to one or more,
but not necessarily all, of the Partners, on the condition that compensating
distributions, determined with or without interest in the discretion of the
General Partners, shall be made to the other Partners on or before the end of
March of the following calendar year so that the total draws and compensating
distributions shall be proportionate. For all purposes of this Agreement, except
as provided in the immediately preceding sentence or Section 1.49(f), a
distribution among the Partners which is not in proportion to Partnership
Percentages shall be regarded as disproportionate. In the event that a
disproportionate distribution occurs, the General Partners shall appropriately
adjust the Capital Accounts of the Partners to reflect such disproportionate
16
distribution. Except in the case of a disproportionate distribution attributable
to the income tax liabilities resulting from special allocations under Section
704(c) of the Code, such adjustment shall be determined as though the
Partnership had redeemed a fraction of the Partnership Interest corresponding to
the amount of the distribution that is disproportionate. This adjustment of
Capital Accounts, and thus Partnership Interests, shall be in addition to the
adjustment in Partnership Percentages.
4.6 No Right to Return of Capital. Except as otherwise expressly provided
in this Agreement, the Partners shall not have the right to demand the return of
all or any portion of their respective Capital Contributions or to demand or
receive property other than cash in return for their respective Capital
Contributions.
5. MANAGEMENT.
5.1 Management of Partnership Business. The General Partners shall be
responsible for managing and conducting the ordinary and usual business and
affairs of the Partnership, and each General Partner shall have the authority to
make management decisions on behalf of the Partnership. Notwithstanding the
foregoing, the following actions and decisions require the approval of the
General Partners owning at least a majority of the General Partnership Interests
(except as expressly provided elsewhere in this Agreement, including, without
limitation, Section 5.2):
(a) the voting of any stock, partnership interest, or interest in a
limited liability company with respect to which the Partnership owns more than
five percent (5%) of the total voting power;
(b) the borrowing of any funds for or by the Partnership in excess of
$200,000 (whether secured or unsecured), the collateralization of any such
borrowing with any Partnership Property, or the prepayment of any such
borrowing;
(c) the approval of Partnership budgets;
(d) the approval of any contracts between the Partnership and any
Partner or any beneficiary, or spouse or descendant of a beneficiary of one of
the Partners;
(e) the retention or termination of an investment manager;
(f) the determination of the Initial Value and Purchase Price of any
Offered Interests or Repurchase Interests;
(g) the decision by the Partnership to purchase any Offered Interests
pursuant to Section 8.6(c);
(h) the determination of whether to pay any portion of a Purchase
Price, or interest owed pursuant to Section 7.4, in NACCO Class A Shares; and
17
(i) the election to subject the Partnership to the unified audit rules
of Sections 6221-6234 of the Code, as provided in Section 5.5.
5.2 Management of Partnership Property Consisting of NACCO Class A Shares
and NACCO Class B Shares: Admission of New General Partners.
(a) The General Partners owning at least a majority of the General
Partnership Interests shall direct the voting of any NACCO Class A Shares and
NACCO Class B Shares held by the Partnership and may authorize the Partnership
to enter into a voting arrangement with respect to any or all of such NACCO
Class A Shares and NACCO Class B Shares.
(b) The Partnership shall not Transfer, or convert to NACCO Class A
Shares, any NACCO Class B Shares without the consent of the General Partners
owning more than seventy five percent (75%) of the General Partnership Interests
and the consent of Partners owning more than seventy five percent (75%) of all
Partnership Interests. Notwithstanding such consent, the Partnership (i) shall
not Transfer any NACCO Class B Shares unless such Transfer is permitted by
Article FOURTH, Section 4 of the NACCO Restated Certificate and (ii) shall not
Transfer, or convert to NACCO Class A Shares, any NACCO Class B Shares unless
such Transfer or conversion is effected in accordance with the terms of the
Stockholders' Agreement.
(c) The Partnership shall not Transfer any NACCO Class A Shares, other
than pursuant to a share for share exchange to acquire NACCO Class B Shares,
without the consent of the General Partners owning more than seventy-five
percent (75%) of the General Partnership Interests and the consent of Partners
owning more than seventy five percent (75%) of all Partnership Interests.
(d) Subject to this Section 5.2(d) and the other provisions of this
Agreement, a General Partner may transfer all, but not less than all, of its
General Partnership Interest to one, but not more than one, Authorized
Transferee of such General Partner. No Person shall be admitted as a General
Partner of the Partnership without the consent of the General Partners owning
more than seventy five percent (75%) of the General Partnership Interests and
the consent of Partners owning more than fifty percent (50%) of all Partnership
Interests. Notwithstanding such consent, no Person shall be admitted as a
General Partner unless such Person is an Authorized Transferee of at least one
Partner of the Partnership.
5.3 Removal of, and Coordination Among, General Partners.
(a) Any General Partner may be removed only by and with the consent of
Partners owning not less than ninety percent (90%) of all Partnership Interests.
(b) So long as more than one General Partner shall be serving, except
as otherwise set forth in this Agreement, the vote or approval of the General
Partners owning at least a majority of the General Partnership Interests shall
be required and shall constitute the actions of the General Partners.
18
(c) Each General Partner may sign on behalf of the Partnership, and
any third party may conclusively rely upon the signature of any General Partner
as being binding upon the Partnership. Any Person dealing in good faith with the
Partnership may conclusively rely upon any writing signed by one or more Persons
certifying (i) that such signing Person is a General Partner, then serving and
(ii) that such signing Person is acting in accordance with the terms of this
Agreement.
(d) The General Partner working regularly in the Partnership's
principal place of business shall be responsible for informing any other General
Partner of any matters requiring the General Partners' approval, and such
General Partner shall keep the other Partners informed on a timely basis as to
all significant matters of concern to the Partnership.
5.4 Compensation of General Partners. The General Partners shall not be
entitled to any compensation for performance of duties under this Agreement as
General Partners. The Partnership shall reimburse the General Partners at cost
for reasonable out-of-pocket expenses incurred in the performance of duties
under this Agreement.
5.5 Tax Matters. The General Partners may elect, pursuant to Section
6231(a)(1)(B)(ii) of the Code, to subject the Partnership to the unified audit
rules of Sections 6221-6234 of the Code. If such election is made, a General
Partner designated by the General Partners shall be the Partnership's "tax
matters partner," as that term is defined in Section 6231(a)(7) of the Code, and
shall receive notice of the commencement of any administrative proceeding at the
Partnership level with respect to any Partnership item or items, and shall
receive notice of any final Partnership administrative adjustment resulting from
any such proceeding, in each case within the meaning of Sections 6223 and 6231
of the Code. The Partnership's tax matters partner shall supply such information
to the Internal Revenue Service as may be necessary to enable the Internal
Revenue Service to provide the Partners with such notices as are required under
the Code. The Partnership's tax matters partner shall also keep each Partner
informed of any administrative or judicial proceeding relative to any adjustment
or proposed adjustment at the Partnership level of Partnership items. Without
the prior written approval of Partners owning more than fifty percent (50%) of
the Partnership Interests, the tax matters partner shall not (a) enter into any
settlement agreement with the Internal Revenue Service which purports to bind
any Person other than the tax matters partner, (b) file a petition as
contemplated by Sections 6226(a) or 6228 of the Code, (c) intervene in any
action as contemplated by Section 6226(b) of the Code, (d) file any request as
contemplated by Section 6227(b) of the Code, or (e) enter into an agreement
extending the period of limitation as contemplated by Section 6229(b)(1)(B) of
the Code.
5.6 Limitation of Liability. No Partner, Former Partner, trustee of a
Partner or Former Partner, or direct or indirect officer or employee of the
Partnership shall be liable to the Partnership or any of its Partners or Former
Partners for any loss, damage, liability or expense suffered by the Partnership,
its Partners or Former Partners on account of any action taken or omitted to be
taken by such Person on behalf of, or at the request of, the Partnership, or in
connection with the organization or operation of the Partnership, provided such
Person discharges such Person's duties in good faith, exercising the same degree
of care and skill that a prudent person would have exercised under the
circumstances in the conduct of such prudent
19
person's own affairs, and in a manner such Person reasonably believes to be in
the best interest of the Partnership. A Person's liability hereunder shall be
limited only for those actions taken or omitted to be taken by such Person in
connection with the organization of the Partnership or the management of the
business and affairs of the Partnership. The provisions of this Section 5.6 are
not intended to limit the liability of any Person in any other connection,
including, but not limited to, any obligations of such Person undertaken in this
Agreement or any contract with the Partnership.
5.7 Right to Indemnification. The Partnership shall indemnify each
Person who has been or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, investigative or appellate (regardless of whether such
action, suit or proceeding is by or in the right of the Partnership or by third
parties), by reason of the fact that such Person is or was a Partner, trustee of
a Partner, direct or indirect officer or employee of the Partnership or
organizer of the Partnership, against all liabilities and expenses, including,
without limitation, judgments, amounts paid in settlement, attorneys' fees,
excise taxes or penalties under the Employee Retirement Income Security Act of
1974, as amended, fines and other expenses, actually and reasonably incurred by
such Person in connection with such action, suit or proceeding (including,
without limitation, the investigation, defense, settlement or appeal of such
action, suit or proceeding); provided, however, that the Partnership shall not
be required to indemnify or advance expenses to any Person from or on account of
such Person's conduct that is finally adjudged to have been knowingly
fraudulent, deliberately dishonest or grossly negligent, or to have involved
willful misconduct; provided, further, that the Partnership shall not be
required to indemnify or advance expenses to any Person in connection with an
action, suit or proceeding initiated by such Person unless the initiation of
such action, suit or proceeding was authorized in advance by the Partnership;
and provided, finally, that a Person shall be indemnified hereunder only for
those actions taken or omitted to be taken by such Person in connection with the
discharge of such Person's obligations for the organization of the Partnership
or the management of the business and affairs of the Partnership and that the
provisions of this Section 5.7 are not intended to extend indemnification to any
Partner or other Person for any obligations of such Partner or other Person
undertaken in this Agreement.
6. BOOKS, AUDITS AND FISCAL MATTERS.
6.1 Partnership Books. The General Partners shall maintain full and
complete books and records for the Partnership at its principal office, and each
Partner and his designated representatives shall at all times have reasonable
access to, and may inspect and copy any of, such books and records.
6.2 Fiscal Year. The fiscal year of the Partnership shall be the calendar
year.
7. FORMER PARTNERS.
7.1 Status of Former Partners. Immediately prior to the occurrence of a
Withdrawal Event with respect to any Partner, such Partner shall cease to be a
Partner of the Partnership and such Partner shall cease to have the power to
exercise any rights or powers of a Partner of the
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Partnership, including, without limitation, the right to vote, and to receive
any distributions of any kind on or in respect of, any Partnership Interests
owned by such Former Partner immediately prior to such Withdrawal Event. A
Former Partner shall have the status of a creditor of the Partnership and the
Partners (but only to the extent any such Partner elects to purchase Repurchase
Interests held by the Former Partner), but only to the extent necessary to
enforce the Repurchase Obligations set forth in Section 8.5.
7.2 Notice by Former Partner. Immediately after the occurrence of a
Withdrawal Event with respect to any Former Partner, such Former Partner shall
notify the Partnership of the Withdrawal Event. A failure to provide notice
under this Section 7.2 will not alter the timing or the effect of the Withdrawal
Event as described under Sections 7.1 and 7.3.
7.3 Effect of Withdrawal Events on Voting. If any vote of the General
Partners, the Limited Partners or the Partners is required under this Agreement
or the Act after a Withdrawal Event but prior to the Closing of the Repurchase
Obligation arising from such Withdrawal Event, then solely for purposes of
determining whether the requisite approval of the General Partners, Limited
Partners or the Partners has been obtained, the Partnership Interests held by
the Former Partner immediately prior to the Withdrawal Event shall be deemed to
have been repurchased by the Partnership.
7.4 Payment of Interest. Notwithstanding any other provision of this
Agreement, at the Closing related to a Repurchase Obligation, the Partnership
and each Partner electing to purchase Repurchase Interests shall pay to the
Former Partner, in addition to the Purchase Price, pro-rated interest,
calculated from the date of the Withdrawal Event up to the date of the Closing,
at an annual rate equal to the annual short-term applicable federal rate in
effect at the date of the Withdrawal Event as provided under Section 7872 of the
Code. The interest may be paid in cash or NACCO Class A Shares on the same basis
as is provided in Section 8.7 with respect to payment of the Purchase Price.
8. TRANSFER OF PARTNERSHIP INTERESTS.
8.1 Securities Laws. Each Partner acknowledges that its Partnership
Interest was offered and sold in reliance upon the representation, hereby
affirmed, that such Partnership Interest is being acquired for investment for
such Partner's own account or in his fiduciary capacity for a fiduciary account,
as appropriate, and not with a view to, or for resale in connection with, the
distribution of such Partnership Interest or any interest therein. Each Partner
also acknowledges that such Partner's Partnership Interest has not been
registered under the Securities Act of 1933 (the "Securities Act") or any state
securities laws. Notwithstanding any other provision in this Agreement, but
subject to express written waiver by the General Partners in the exercise of
their reasonable judgment, no portion of or interest in any Partnership Interest
may be offered for sale or be the subject of a Transfer without the registration
of the Partnership Interest under the Securities Act and applicable state
securities laws, unless the Partnership shall have received such assurances
satisfactory to the General Partners that such Transfer of Partnership Interests
does not violate the Securities Act, any state securities laws or any other law
applicable to the Partnership, which assurances may include, without limitation,
such legal opinions which they in their good faith and reasonable discretion
deem appropriate in light of the
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facts and circumstances relating to such proposed Transfer of Partnership
Interests, together with such representations, warranties and indemnifications
from the Transferor and the Transferee as the General Partners in their good
faith and reasonable discretion deem appropriate to confirm the accuracy of the
facts and circumstances that are the basis for any such opinion or other
assurances and to protect the Partnership and the other Partners from any
liability resulting from any such Transfer of Partnership Interests. Such
opinions, representations, warranties and indemnities may include, without
limitation, assurance that the Transfer of Partnership Interests is exempt from
any registration or qualification provisions arising under applicable federal
and state securities laws and would not require the registration or
qualification of the Partnership Interest under any such laws.
8.2 Restriction on Transfers. Except as otherwise provided in this
Agreement, no Partner shall Transfer any of the Partnership Interests now owned
or hereafter acquired by such Partner. Moreover, no Partner shall Transfer or
attempt to Transfer any Partnership Interest if such Transfer or attempted
Transfer is to a Person other than an Authorized Transferee of such Partner. In
the event of any purported or attempted Transfer of Partnership Interests that
does not comply with this Agreement, the purported transferee or successor by
operation of law shall not be deemed to be a Partner of the Partnership for any
purpose and shall not be entitled to any of the rights of a Partner of the
Partnership, including, without limitation, the right to vote the Partnership
Interests or to receive a certificate for Partnership Interests or any
distributions of any kind on or with respect to Partnership Interests. Any
purported or attempted Transfer of Partnership Interests made other than in
accordance with the provisions of this Agreement shall be void ab initio and the
last holder of record who acquired such Partnership Interests in a manner not
contrary to the provisions of this Agreement shall be recognized as the holder
of such Partnership Interests for all purposes and the Partnership Interests
shall continue to be treated as Partnership Interests for all purposes under
this Agreement, shall be deemed owned by such recognized holder for purposes of
the operation of this Agreement and shall continue to be subject to the terms of
this Agreement.
8.3 Permitted Transfers.
(a) Notwithstanding anything to the contrary contained herein (other
than Sections 5.2(d), 8.1 and 8.2, which will apply to any Transfer of
Partnership Interests), each Partner shall be entitled to Transfer all or any
portion of his Partnership Interests to any Authorized Transferee of such
Partner, provided that such Partner has first obtained the written consent of
the General Partners owning at least a majority of the General Partnership
Interests, which consent may be withheld for any reason or for no reason at all,
without need to comply with the other provisions of this Agreement.
(b) Each of the Partners hereby acknowledges and consents to, and
waives any rights such Partner may have under this Agreement with respect to all
Transfers of Partnership Interests made by gift prior to the date hereof by any
Partner to any Person. Each Partner hereby agrees to be subject to the
restrictions and obligations of a Partner under this Agreement and to hold all
Partnership Interests now owned or later acquired by such Partner in accordance
with the terms of this Agreement.
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8.4 Purchase Right. Subject to Section 8.10, at any time after the date
hereof, the Partnership and the Family Holders shall have a right of first
refusal (the "Purchase Right") to purchase, pursuant to the terms of this
Section 8.4, from any Partner (for purposes of this Section 8.4, a "Selling
Partner") intending to Transfer, other than as permitted in Section 8.3 of this
Agreement, all or, if not prohibited by Section 5.2(d), any portion, of his
Partnership Interests (including any Partnership Interests acquired after the
date hereof).
(a) A Selling Partner intending to Transfer all or, if not prohibited
by Section 5.2(d), any portion, of his Partnership Interests shall first deliver
to the Partnership a written notice (the "Seller's Notice") specifying (i) the
Partnership Interests to be transferred (the "Offered Interests"); and (ii) the
identity of the proposed Authorized Transferee(s).
(b) Within ten (10) days after the Partnership's receipt of the
Seller's Notice, the Partnership shall deliver to the Selling Partner a
Valuation Notice setting forth the Initial Value and the General Partners and
the Selling Partner shall determine the Purchase Price pursuant to Section 1.56
of this Agreement.
(c) Within ten (10) days after the Starting Date, the Partnership
shall notify each Family Holder (other than the Selling Partner) of (iii) the
Starting Date; (iv) the number of Offered Interests; and (v) the Purchase Price
of the Offered Interests. The Partnership's notice shall include a copy of the
Seller's Notice.
(d) Within twenty-five (25) days after the Starting Date, each Family
Holder (other than the Selling Partner) shall notify the Partnership of how
many, if any, of the Offered Interests he elects to purchase.
(e) Within thirty-five (35) days after the Starting Date, the
Partnership shall provide written notice to the Selling Partner and to each
other Partner of (i) the number of Offered Interests to be purchased by Family
Holders and the allocation of the Offered Interests among the Family Holders
pursuant to the terms of Section 8.6; (ii) the number of Offered Interests to be
purchased by the Partnership pursuant to the terms of Section 8.6; and (iii) the
time, date and place of Closing, which shall be no sooner than ninety (90) days
after the Starting Date and no later than one hundred twenty (120) days after
the Starting Date.
(f) The Offered Interests shall be allocated among the Partnership and
the Family Holders, and within each Family Group among its Family Holders, in
the manner provided in Section 8.6.
(g) If the Family Holders and the Partnership do not elect to purchase
all of the Offered Interests, then the Selling Partner may, subject to Sections
5.2(d), 8.1 and 8.2, Transfer the portion of the Offered Interests that the
Family Holders and the Partnership do not elect to purchase (the "Waived
Interests") to the Authorized Transferee(s) of the Selling Partner specified in
the Seller's Notice; provided, however, that such Transfer occurs on terms no
more favorable to such Authorized Transferee(s) than the terms of the purchase
of the Offered Interests by the Family Holders and the Partnership. In no event
shall any Selling Partner Transfer, or
23
attempt to Transfer, any Waived Interests to a Person who is not an Authorized
Transferee of the Selling Partner.
8.5 Repurchase Obligations to Purchase Partnership Interests. At any time
after the date hereof, the Partnership and the Family Holders shall collectively
have the obligation (the "Repurchase Obligation") to purchase from any Person
who is then a Former Partner all of the Partnership Interests (the "Repurchase
Interests") directly or indirectly owned by such Former Partner immediately
prior to the applicable Withdrawal Event, and such Former Partner shall be
obligated to sell to the purchasing Family Holders and/or the Partnership, as
the case may be, all of his Repurchase Interests. The Repurchase Obligation
shall be effected as follows:
(a) Within ten (10) days after the Partnership's receipt of a notice
from a Former Partner as provided in Section 7.2 or the Partnership's
independent determination that a Withdrawal Event has occurred, the Partnership
shall provide written notice (the "Repurchase Notice") to the Former Partner of
(i) the Repurchase Obligation; (ii) the number of Repurchase Interests; and
(iii) the Initial Value of the Repurchase Interests. Thereafter, the Partnership
and the Former Partner shall determine the Purchase Price pursuant to Section
1.56.
(b) Within ten (10) days after the Starting Date, the Partnership
shall notify each Family Holder of (i) the occurrence of the Repurchase
Obligation; (ii) the number of Repurchase Interests; (iii) the Purchase Price of
the Repurchase Interests; (iv) the provisions set forth in Section 7.4; and (v)
the Starting Date.
(c) Within twenty-five (25) days after the Starting Date, each Family
Holder shall notify the Partnership of how many, if any, of the Repurchase
Interests he elects to purchase.
(d) Within thirty-five (35) days after the Starting Date, the
Partnership shall provide written notice to the Former Partner and to each
Partner of (i) the allocation of the Repurchase Interests among the Family
Holders pursuant to the terms of Section 8.6 of this Agreement; (ii) the number
of Repurchase Interests to be purchased by the Partnership pursuant to the terms
of Section 8.6; (iii) the time, date and place of Closing, which shall be no
sooner than ninety (90) days after the Starting Date and no later than one
hundred twenty (120) days after the Starting Date; and (iv) amounts payable to
the Former Partner pursuant to Section 7.3.
(e) The Repurchase Interests shall be allocated among the Partnership
and the Family Holders, and within each Family Group among its Family Holders,
in the manner provided in Section 8.6.
8.6 Allocation of Offered Interests / Repurchase Interests. Offered
Interests and Repurchase Interests shall be allocated among the Partnership and
the Family Holders pursuant to the terms of this Section 8.6. At the Closing,
the Partnership and such Family Holders, as the case may be, shall be obligated
to purchase the Offered Interests or Repurchase Interests so allocated pursuant
to the terms of this Agreement. Notwithstanding anything to the contrary
contained herein, no Family Holder shall be entitled to receive, or be obligated
to purchase, more Partnership Interests than such Family Holder has elected to
purchase pursuant to Section 8.4(d)
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or 8.5(c), as the case may be. All Offered Interests or Repurchase Interests
shall be allocated as follows:
(a) Allocation to Original Holders of Offered Interests. Any Offered
Interests or Repurchase Interests shall first be allocated collectively to
Family Holders who are members of the Family Group (the "Original Holders") to
which the Selling Partner belongs or to which the Former Partner belonged prior
to the applicable Withdrawal Event to the extent such Original Holders have
elected to purchase the Offered Interests or Repurchase Interests. Such Offered
Interests or Repurchase Interests shall be allocated among the Original Holders
in accordance with Section 8.6(d).
(b) Allocation among Family Groups. Any Offered Interests or
Repurchase Interests not allocated pursuant to Section 8.6(a) (the "Remaining
Interests") shall be allocated collectively among Family Holders of the Family
Groups (other than the Original Holders) which have Partners electing to
purchase Offered Interests or Repurchase Interests as follows:
(i) If Family Holders of a Family Group have collectively
elected to purchase an amount of Offered Interests or
Repurchase Interests which is less than or equal to the
Family Holders' Family Group Proportionate Part of the
Remaining Interests, then such Family Holders of such Family
Group shall collectively be allocated the amount of
Partnership Interests that such Family Holders have
collectively elected to purchase.
(ii) If Family Holders of a Family Group have collectively
elected to purchase an amount of Offered Interests or
Repurchase Interests which is greater than the Family
Holders' Family Group Proportionate Part of the Remaining
Interests, then such Family Holders of such Family Group
shall collectively, in the first instance, be allocated the
Family Holders' Family Group Proportionate Part of the
Remaining Interests.
(iii) If additional Remaining Interests remain to be allocated
after the application of subsections (i) and (ii) above (the
"Outstanding Remaining Interests"), then the Family Holders
of each Family Group which has collectively elected to
purchase an amount of Offered Interests or Repurchase
Interests which exceeds the Family Holders' Family Group
Proportionate Part of the Remaining Interests shall be
allocated an additional amount of the Remaining Interests
equal to the lesser of:
(A) The amount of Offered Interests or Repurchase Interests
which Family Holders of such Family Group elected to
purchase but which were not allocated to it by reason
of subsection (ii) above, or
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(B) That portion of the Outstanding Remaining Interests
represented by a fraction the numerator of which is the
percentage of Partnership Interests held by Family
Holders of such Family Group (prior to such
allocation), and the denominator of which is the
percentage, as the case may be, of Partnership
Interests held by Family Holders of all Family Groups
which have elected to purchase an amount of Offered
Interests or Repurchase Interests in excess of the
amount of those Offered Interests or Repurchase
Interests previously allocated to them under this
Section 8.6.
(iv) Any Partnership Interests remaining to be allocated after
the application of subsections (i), (ii) and (iii) above,
shall be allocated in accordance with the procedures
described in subsection (iii) above until either (A) all of
the Offered Interests or Repurchase Interests, as the case
may be, which Family Holders have elected to purchase have
been allocated, or (B) there remains Family Holders of only
one Family Group which has not been allocated all of the
Offered Interests or Repurchase Interests it has elected to
purchase, in which event all of the then unallocated Offered
Interests or Repurchase Interests shall be collectively
allocated to Family Holders of such Family Group up to the
amount that such Family Holders of such Family Group elected
to purchase.
(c) Allocation to the Partnership. The Partnership shall have the
right, but shall not be obligated, to purchase any Offered Interests not
allocated to Family Holders of a Family Group. The Partnership shall be
obligated to purchase any Repurchase Interests not allocated to Family Holders
of a Family Group.
(d) Allocation of Partnership Interests among Family Group Members.
Offered Interests or Repurchase Interests collectively allocated to Family
Holders of a Family Group (including Original Holders) pursuant to Sections
8.6(a) or 8.6(b) shall be allocated among the Family Holders of such Family
Group, as follows:
(i) First, to the Qualified Trust of the Family Group Head of
such Family Group in an amount equal to the amount of
Offered Interests or Repurchase Interests such Qualified
Trust of the Family Group Head elects to purchase; and
(ii) Second, to each Family Holder, other than the Qualified
Trust of the Family Group Head, electing to purchase Offered
Interests or Repurchase Interests in an amount determined by
multiplying (A) the amount of Offered Interests or
Repurchase Interests allocated collectively to Family
Holders of such Family Group and not purchased by the
Qualified Trust of the Family Group Head, by (B) a fraction,
the numerator of which is the amount of Offered
26
Interests or Repurchase Interests elected to be purchased by
such Family Holder, and the denominator of which is the
aggregate amount of Offered Interests or Repurchase
Interests elected to be purchased by all Family Holders,
other than the Qualified Trust of the Family Group Head,
belonging to such Family Group.
8.7 Terms of Sale. The Purchase Price for all Partnership Interests
purchased pursuant to Section 8.4 or Section 8.5 of this Agreement shall be paid
at the Closing, as follows:
(a) If the purchaser is the Partnership, the Partnership, at its
election and after consultation with counsel, may pay its portion of the
Purchase Price in NACCO Class A Shares, immediately available United States
funds, or any combination of such consideration as follows:
(i) to the extent that the Partnership elects to pay the
Purchase Price in NACCO Class A Shares, the Partnership
shall deliver to the Selling Partner such number of NACCO
Class A Shares as shall be equal to the quotient of (A) the
portion of the Purchase Price payable in NACCO Class A
Shares, divided by (B) the Applicable NACCO Class A Closing
Price Average (if necessary the Partnership may, subject to
Section 5.2, convert any NACCO Class B Shares held by the
Partnership to NACCO Class A Shares to pay such Purchase
Price); and
(ii) immediately available United States funds equal to that
portion of the Purchase Price not paid by delivery of NACCO
Class A Shares.
(b) If the purchaser is a Partner, such Partner, at his election, may
pay his portion of the Purchase Price in NACCO Class A Shares, immediately
available United States funds, or any combination of such consideration as
follows:
(i) to the extent that the Partner elects to pay the Purchase
Price in NACCO Class A Shares, such Partner shall deliver to
the Selling Partner such number of NACCO Class A Shares as
shall be equal to the quotient of (A) the portion of the
Purchase Price payable in NACCO Class A Shares, divided by
(B) the Applicable NACCO Class A Closing Price Average; and
(ii) immediately available United States funds equal to that
portion of the Purchase Price not paid by delivery of NACCO
Class A Shares.
8.8 Closing.
(a) The closing of the purchase and sale of any Partnership Interests
pursuant to this Agreement (the "Closing") shall occur at the time, date and
place specified by the Partnership in its written notice pursuant to Sections
8.4(e)(iii) or 8.5(d)(iii), as the case may be.
27
(b) At the Closing, transfer instruments shall be respectively
delivered by the Selling Partner or the Former Partner, as the case may be, to
each purchaser against payment of such purchaser's portion of the Purchase Price
and, if applicable, the amounts described in Section 7.4. Such delivery shall
constitute warranties by the Selling Partner or the Former Partner, as the case
may be, that such Person has full authority to Transfer the Partnership
Interests to such purchaser and that such purchaser is acquiring the Partnership
Interests free and clear of all liens, encumbrances or other outstanding
interests of any nature, other than those created pursuant to the terms of this
Agreement.
(c) In the event of a Repurchase Obligation, the purchase and sale of
the Repurchase Interests shall, for all purposes of this Agreement other than
Section 7.3, be deemed to have occurred on the date of the Withdrawal Event.
8.9 Legal Requirements. The Transfer of any Partnership Interests pursuant
to this Agreement shall be subject to compliance with all applicable state and
federal securities laws, and each Partner agrees without additional
consideration to do all necessary things reasonably requested by the Partnership
in connection therewith, the reasonable expenses of such to be paid by the
Selling Partner or the Former Partner, as the case may be.
8.10 Exceptions.
(a) Notwithstanding anything to the contrary contained in this
Agreement, the occurrence of an event described in Section 1.25, pursuant to
which a Partner ceases to be a Partner and is thereafter treated as a Former
Partner, shall not give rise to Purchase Rights under Section 8.4 but instead
shall give rise to the Repurchase Obligation under Section 8.5.
(b) The substitution of a trustee of a Partner shall not give rise to
Purchase Rights under Section 8.4, provided that the substitute trustee has
executed and delivered to the Partnership a counterpart of this Agreement
agreeing to be subject to the restrictions and obligations of a Partner
hereunder and to hold all Partnership Interests then owned or later acquired by
such trust in accordance with the terms of this Agreement.
(c) The termination of a Partner shall not give rise to Purchase
Rights under Section 8.4, provided that such termination results in a Transfer
of Partnership Interests only to Authorized Transferees of such Partner and to
no other Person.
9. CODE SECTION 754 ELECTION. Upon the approval of the General Partners, the
Partnership shall file an election under Code Section 754 to adjust the tax
basis of the Partnership Property, with respect to any distribution of
Partnership Property to a Partner permitted by this Agreement or a Transfer of a
Partnership Interest in accordance with the terms of this Agreement, in
accordance with Code Sections 734(b) and 743(b). The Partners acknowledge that
once a Code Section 754 election shall be validly filed by the Partnership, it
shall remain in effect indefinitely thereafter unless the Internal Revenue
Service approves the revocation of such election.
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10. DISSOLUTION.
10.1 Dissolution and Termination. The Partnership shall continue in
existence until dissolved (a) with the consent of the General Partners owning
more than seventy five percent (75%) of the General Partnership Interests and
Partners owning more than ninety percent (90%) of all Partnership Interests, or
(b) with the consent of the General Partners, at such time, if any, as the
Partnership ceases to own any NACCO Class A Shares and NACCO Class B Shares. In
the event that the Partnership is dissolved, the assets of the Partnership shall
be liquidated as promptly as is consistent with obtaining the Fair Market Value
thereof, and the proceeds therefrom, together with any assets distributed in
kind, shall be distributed (i) first to creditors to satisfy all debts and
liabilities of the Partnership (including any liabilities arising under Section
8.5) other than loans or advances made by the Partners to the Partnership, (ii)
then to the establishment of reserves deemed reasonably necessary by the General
Partners to satisfy contingent or unforseen liabilities or obligations of the
Partnership, (iii) then to the repayment of any loans or advances made by the
Partners to the Partnership, (iv) with the balance, if any, to be distributed in
accordance with the balances in each Partner's Capital Account at that time.
Solely for the purposes of determining the balances of the Partner's Capital
Accounts at that time, any Partnership Property that is distributed in kind
shall be treated as though such Partnership Property were sold for its Fair
Market Value as of the date of distribution, as determined by an Independent
Appraiser. Upon completion of the foregoing, the Partnership shall be
terminated.
10.2 Limitations On In Kind Distributions. Notwithstanding anything to the
contrary contained in this Agreement, no distribution in kind of NACCO Class B
Shares held by the Partnership shall be made unless such distribution by the
Partnership is permitted under Article FOURTH, Section 4 of the NACCO Restated
Certificate.
10.3 Continuation of Business. Neither the Transfer of any Partnership
Interest pursuant to Section 8 hereof nor the bankruptcy or withdrawal of a
Partner shall cause the dissolution or termination of the Partnership or have
any effect upon the continuance of the Partnership business. No Partner shall
have a right to withdraw from the Partnership or to abandon any Partnership
Interest.
11. POWER OF ATTORNEY.
11.1 Grant of Power.
(a) Each Partner by his signature below irrevocably makes, constitutes
and appoints the General Partners and each of them, his true and lawful attorney
in his name, place and xxxxx in any capacities, with the power from time to time
to substitute or resubstitute one or more others as such attorney, and to make,
execute, swear to, acknowledge, verify, deliver, file, record and publish any
and all documents, certificates or other instruments which may be required or
deemed desirable by the General Partners to (i) effectuate the provisions of any
part of this Agreement or any amendments to this Agreement, (ii) enable the
Partnership to conduct its business, (iii) comply with any applicable law in
connection with the Partnership's conduct of its business, or (iv) retain
professional services, including accounting and legal counsel, for the
Partnership (including, without limitation, the waiver on behalf of the
Partnership and each
29
Partner of any conflict arising from such professional's representation of
another client on matters in which the interests of the Partnership, any Partner
or any affiliate of the Partnership or any Partner may be adverse to such other
client).
(b) Each Partner by his signature below irrevocably makes, constitutes
and appoints Xxxxxx X. Xxxxxx, Xx., Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx, Xxxxxxxxx
X. Xxxxxx, Xxxxxx X. XxXxxxx, Xxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxxxxxxxx, and
each of them, his true and lawful attorney in his name, place and xxxxx in any
capacities, with the power from time to time to substitute or resubstitute one
or more others as such attorney, to execute any and all statements under Section
13 or Section 16 of the Securities Exchange Act of 1934, and the rules and
regulations promulgated thereunder, of beneficial ownership of NACCO Class A
Shares and/or NACCO Class B Shares by the Partnership and its Partners,
including all statements on Schedule 13D and all amendments thereto, all joint
filing agreements pursuant to Rule 13d-l(k)(1) under such Act in connection with
such statements, all initial statements of and changes of beneficial ownership
on Forms 3, 4 and 5 and any and all other documents to be filed with the
Securities and Exchange Commission, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities
and Exchange Commission.
(c) Each Partner grants to said attorney or attorneys-in-fact, and
each of them, full power and authority to do so and to perform each and every
act and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as the undersigned might or could do in
person, hereby ratifying and confirming all that said attorney or
attorneys-in-fact or any of them or their substitutes or resubstitutes, may
lawfully do or cause to be done by virtue of this Section 11.1.
11.2 Irrevocable Nature. It is expressly intended by each Partner that the
foregoing power of attorney is a special power of attorney coupled with an
interest in favor of each of those appointed as attorney-in-fact on his behalf,
and as such shall be irrevocable and shall survive such Partner's dissolution or
other termination of existence.
11.3 Further Assurances - Power of Attorney. If applicable law requires
additional or substituted language in order to validate the power of attorney
intended to be granted by this Section 11, each Partner agrees to execute and
deliver such additional instruments and to take such further acts as may be
necessary to validate such power of attorney.
11.4 Transfer of Partnership Interests. The foregoing power of attorney
shall survive the delivery of an instrument of transfer by any Partner of the
whole or any portion of or interest in his Partnership Interest, except that (i)
where a Partner becomes a Former Partner, or (ii) where a Transferee of such
Partnership Interest has been approved as a successor Partner and the Transferor
shall thereupon cease being a Partner (all in accordance with this Agreement),
then the power of attorney of the Former Partner or the Transferor Partner, as
the case may be, shall survive the cessation of Partner status or the delivery
of such instrument of transfer, as the case may be, for the sole purpose of
enabling the attorneys-in-fact for such Former Partner or the Transferor Partner
(or any of them) to execute, swear to, acknowledge and file any and all
instruments necessary to effectuate or reflect such cessation, transfer and
succession.
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12. GENERAL PROVISIONS.
12.1 Obtaining Partner Approvals of Partnership Actions. The requisite
approval of the General Partners or Partners, whichever is appropriate, may take
the form of the approval of an outline of the general terms of the transaction,
and the negotiation of detailed terms may be delegated to the General Partners
or to any one or more specified Partners, or the approval may be in the form of
a blanket delegation of authority to the General Partners or to any one or more
specified Partners to act on behalf of the Partnership in regard to a particular
transaction that is being considered.
12.2 Arbitration. Any Arbitrable Dispute shall be finally settled by
arbitration under the then applicable Commercial Arbitration Rules of the
American Arbitration Association, by one or more arbitrators agreed upon by the
parties or, in the absence of such an agreement, appointed in accordance with
such Rules. The arbitration proceedings shall be held in Cleveland, Ohio.
Judgment upon the award rendered may be entered in any court having jurisdiction
and application may be made to such court for judicial acceptance of such award
and an order of enforcement as the case may be. The Partners hereby agree that
the rendering of an award by the arbitrator or arbitrators shall be a condition
precedent to the initiation of any legal proceedings with respect to any
Arbitrable Dispute.
12.3 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been given (a) when
the same are delivered in person, or (b) one business day after being sent by
express or overnight mail or (c) three business days after being deposited in
the United States first class mail, postage prepaid, to the Partners at the
addresses set forth in Schedule B attached hereto, and to the Partnership at the
address of its principal office, or at such other address as the General
Partners may from time to time determine. A delivery receipt shall be conclusive
evidence that the respective mailing has in fact been delivered and the date
thereof. Any Partner may change his address for notices by designating a new
address by notice given to the other Partners and the Partnership in accordance
with this Section 12.3.
12.4 Waiver of Right to Partition. The Partners, by execution of this
Agreement, waive their respective rights to partition of the Partnership
Property.
12.5 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective Transferees.
12.6 Headings. The section headings in this Agreement are inserted solely
as a matter of convenience and for reference, and are not a substantive part of
this Agreement.
12.7 Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto and supersedes and cancels any oral representations,
warranties, or communications among any parties hereto regarding the
transactions contemplated hereby and the subject matter hereof. Neither this
Agreement nor any provision hereof may be changed, waived, discharged or
terminated orally, but only by an agreement in writing signed by the party
against whom or which the enforcement of such change, waiver, discharge or
termination is
31
sought. Notwithstanding the immediately preceding sentence, the General Partners
may, without the consent of any other party, amend Schedule A and Schedule B as
necessary to reflect the addition of any new Partners, any additional Capital
Contributions by existing Partners, any change in Partnership Percentages by
reason of disproportionate additional Capital Contributions or distributions or
any Transfers of Partnership Interests, in each case as effected in accordance
with the terms of this Agreement.
12.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
12.9 Counterparts. This Agreement and any documents executed in connection
herewith may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
12.10 Interpretation. All pronouns used herein shall be deemed to refer to
the masculine, feminine or neuter gender as the context requires. All references
herein to singular nouns shall, to the extent necessary, refer to the plural
nouns and all references herein to plural nouns shall, to the extent necessary,
refer to the singular noun.
12.11 Remedies Cumulative. All rights and remedies granted to the
Partnership or to any Partner hereunder shall be cumulative with, and not in
derogation of or exclusive of, any rights and remedies which may be available by
operation of law or otherwise.
12.12 Further Assurances. Each of the parties hereto agrees to execute and
deliver such instruments, and to take such other actions, as shall be necessary
or appropriate in connection with the consummation of the transactions
contemplated hereby or the operation of the Partnership.
12.13 Severability. If any provision of this Agreement or the application
thereof to any Person or circumstance shall be invalid or unenforceable to any
extent, the remainder of this Agreement and the application of such provision to
any other Person or circumstance shall not be affected thereby and shall be
enforced to the fullest extent permitted by law. If the final judgment of a
court of competent jurisdiction declares that any term or provision hereof is
invalid or unenforceable, the court making the determination of invalidity or
unenforceability shall have the power to delete specific words or phrases, or to
replace any invalid or unenforceable term or provision with a term or provision
that is valid and enforceable and that comes closest to expressing the intention
that the invalid or unenforceable term or provision, and this Agreement shall be
enforceable as so modified after the expiration of the time within which the
judgment may be appealed.
32
IN WITNESS WHEREOF, the Partners have hereunto set their hands and
seals as of the day and year first above written.
Trust created by the Agreement, dated July
20, 2000, as supplemented, amended and
restated, between Xxxxxx X. Xxxxxx, Xx., as
trustee, and Xxxxx X. Xxxxxx, creating a
trust for the benefit of Xxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------------------------
By: Xxxxxx X. Xxxxxx, Xx., Trustee
SIGNATURE PAGE FOR AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF
XXXXXX ASSOCIATES IV, L.P.
Trust created by the Agreement, dated as of
September 28, 2000, as supplemented, amended
and restated, between Xxxxxx X. Xxxxxx, Xx.,
as trustee, and Xxxxxx X. Xxxxxx, Xx.,
creating a trust for the benefit of Xxxxxx
X. Xxxxxx, Xx.
/s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------------------------
By: Xxxxxx X. Xxxxxx, Xx., Trustee
SIGNATURE PAGE FOR AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF
XXXXXX ASSOCIATES IV, L.P.
Trust created by the Agreement, dated
December 29, 1967, as supplemented, amended
and restated, between Xxxxxx X. Xxxxxx, as
trustee, and Xxxxxx X. Xxxxxx, creating a
trust for the benefit of Xxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxx
--------------------------------------------
By: Xxxxxx X. Xxxxxx, Trustee
SIGNATURE PAGE FOR AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
OF XXXXXX ASSOCIATES IV, L.P.
Trust created by the Agreement, dated June
22, 1971, as supplemented, amended and
restated, between Claiborne X. Xxxxxx, as
trustee, and Claiborne X. Xxxxxx, creating a
trust for the benefit of Claiborne X. Xxxxxx
/s/ Claiborne X. Xxxxxx
--------------------------------------------
By: Claiborne X. Xxxxxx, Trustee
SIGNATURE PAGE FOR AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF
XXXXXX ASSOCIATES IV, L.P.
Trust created by the Agreement, dated
September 11, 1973, as supplemented, amended
and restated, between Xxxxx X. Xxxxxx, as
trustee, and Xxxxx X. Xxxxxx, creating a
trust for the benefit of Xxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxx
--------------------------------------------
By: Xxxxx X. Xxxxxx, Trustee
SIGNATURE PAGE FOR AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF
XXXXXX ASSOCIATES IV, L.P.
Trust created by the Agreement, dated
September 28, 2000, as supplemented, amended
and restated, between Xxxxxx X. Xxxxxx, Xx.,
as trustee, and Xxxxx X. Xxxxxx, creating a
trust for the benefit of Xxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------------------------
By: Xxxxxx X. Xxxxxx, Xx., Trustee
EXHIBIT 1
XXXXXX ASSOCIATES IV, L.P.
FORM OF SIGNATURE PAGE
FOR NEW PARTNER
Limited Partner Signature Page for Amended and Restated Limited Partnership
Agreement for Xxxxxx Associates IV, L.P. (the "Partnership Agreement".)
By signing below, the undersigned hereby (i) agrees to be subject to the
restrictions and obligations of a Partner under the Partnership Agreement and to
hold all Partnership Interests then owned or later acquired by the undersigned
in accordance with the terms of the Partnership Agreement, and (ii) represents
and warrants to the Partners (as that term is defined in the Partnership
Agreement) as to the matters contained in Sections 3 and 7.1 of the Partnership
Agreement.
[QUALIFIED TRUST THAT IS AN AUTHORIZED
TRANSFEREE AND A NEW PARTNER]
By:
---------------------------------
Name:
---------------------------------
Title: Trustee
---------------------------------
Dated:
------------------------------
