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DEVON ASSOCIATES
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PARTNERSHIP AGREEMENT
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This Partnership Agreement (this "Agreement") of Devon
Associates (the "Company"), a general partnership organized pursuant to the
laws of the State of New York, is entered into and shall be effective as of
February 13, 1996 (the "Effective Date") by and between Cayuga Associates L.P.,
a Delaware limited partnership ("Cayuga"), and Fleetwood Corp., a Delaware
corporation ("Fleetwood"). As used in this Agreement, the term "Members" shall
mean the partners of the Company from time to time. Initially, Cayuga and
Fleetwood shall be the only Members; however, any Person may cease to be a
Member and any Person may become a Member, in either case as provided in this
Agreement.
ARTICLE I.
DEFINITIONS AND REPRESENTATIONS AND WARRANTIES
Section 1.01 Definitions. As used in this Agreement, the
terms set forth below shall have the following meanings:
"Affiliate" means, as to any Person, (i) any other Person (and
the immediate family members of such Person) that controls, is controlled by,
or is under common control with the first Person; and (ii) if the first Person
is a natural person, the immediate family members of that Person.
"Associate" has the meaning specified in Rule 12b-2 under the
Exchange Act.
A Person shall be deemed to "Beneficially Own" (and to be the
"Beneficial Owner" and have "Beneficial Ownership" of) any security if (i) such
Person "beneficially owns" such security within the meaning of Rule 13d-3 under
the Exchange Act or (ii) such Person has any direct or indirect economic
interest in such security.
"Business Day" has the meaning specified in Rule 14d-1 under
the Exchange Act.
"Buy/Sell Closing" has the meaning specified in Section
7.05(b)(iv).
"Buy/Sell Notice" means a Cayuga Buy/Sell Notice or a
Fleetwood Buy/Sell Notice, as the case may be.
"Buy/Sell Notice Date" means the date on which a Fleetwood
Buy/Sell Notice or a Cayuga Buy/Sell Notice, as the case may be, is received by
the Noticed Member.
"Buy/Sell Price" has the meaning specified in the terms Cayuga
Buy/Sell Notice and Fleetwood Buy/Sell Notice.
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"Buy/Sell Purchase Price" means, with respect to any sale of
Interests, Member Units and Member Loans by a Member Group pursuant to a
Buy/Sell Notice, the sum of (i) product of (a) the amount of Interests being
sold by such Member Group times (b) the Buy/Sell Price, plus (ii) the product
of (x) the number of Member Units being sold by such Member Group times (y) the
Imputed Unit Price, plus (iii) the principal amount of Member Loans being sold
by such Member Group together with accrued interest on such Member Loans
through the Buy/Sell Closing.
"Buy/Sell Right" means the right of a Member Group to give a
Buy/Sell Notice.
"Buy/Sell Trigger" means any of the events described in
Section 7.05(b)(i), each of which gives the specified Member Groups a Buy/Sell
Right upon the occurrence (and during the continuation) of such Buy/Sell
Trigger.
"Cayuga Buy/Sell Notice" means a notice that the Cayuga Group
has elected to exercise its Buy/Sell Right pursuant to and as provided in
Section 7.05, which notice shall contain and constitute an irrevocable offer by
Cayuga, on behalf of the Cayuga Group, to either (i) purchase all Interests,
all Member Units and all Member Loans Beneficially Owned by the Icahn Group, or
(ii) sell to Fleetwood all Interests, all Member Units and all Member Loans
Beneficially Owned by the Cayuga Group, in either case for the same cash price
for each percentage point of Interests (the "Buy/Sell Price") specified by
Cayuga in such notice, for the Imputed Unit Price per Member Unit and for the
principal amount of such Member Loans together with accrued interest thereon
through the Buy/Sell Closing.
"Cayuga Group" means, collectively, (i) Cayuga and its
respective Affiliates, (ii) each Person who shall be a general or limited
partner in Cayuga and each of their respective Affiliates and (iii) each Person
who is a direct or indirect transferee of any Cayuga Interests.
"Cayuga Member" means each Person who is both a member of the
Cayuga Group and a Member.
"Cayuga Interests" means the Interests originally issued to
Cayuga and any other Interests subsequently acquired by Cayuga or any of its
Affiliates.
"Cayuga Transfer Notice" means a written notice given by
Cayuga to Fleetwood indicating that a member of the Cayuga Group intends to
make a transfer pursuant to Section 7.05(a)(ii), which notice shall specify in
detail the terms and conditions (including the proposed transferee) of the
proposed transfer.
"Closing Date" means each date on which an Offer expires
pursuant to its terms and the Company accepts for payment, and thereby
purchases, Units validly tendered and not withdrawn pursuant to the Offer.
"Commenced" means the commencement of a Tender Offer, as
determined under Rule 14d-2 of the Exchange Act or, if such Tender Offer is not
subject to Section 14(d) of the Exchange Act, as determined in good faith by
the Manager.
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"Commission" means the United States Securities and Exchange
Commission.
"Company Units" means all Units acquired by the Company
pursuant to a Tender Offer by the Company or in a Negotiated Purchase.
"Competing Offer" means a Tender Offer for Units which (i) is
Commenced prior to the expiration of the Offer by a Person that is not an
Affiliate of any Member and (ii) has a cash purchase price per Unit that is at
least 5% greater than the purchase price per Unit of the Offer on the date such
Competing Offer is Commenced; provided, however, that a Tender Offer for Units
which satisfies the criteria set forth in clauses (i) and (ii) nonetheless will
not constitute a Competing Offer if, on the date such Tender Offer is
Commenced, 15% or more of the outstanding Units have been validly tendered and
not withdrawn pursuant to the Offer; provided, however, that if the purchase
price of the Competing Offer is increased prior to the termination of the
Offer,then such price increase shall be deemed to constitute the Commencement
of a new Competing Offer for purposes of Section 4.02.
"Effect a Redemption" has the meaning specified in Section
10.14.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Extraordinary Transaction" means any of (i) a liquidation of
a Partnership, (ii) a sale of all or substantially all of a Partnership's
assets, (iii) a merger, consolidation, business combination, "roll-up" or other
similar transaction involving a Partnership, including without limitation any
such transaction to be achieved in whole or in part by means of an exchange
offer, or (iv) any other transaction, including but not limited to a
termination of all or substantially all of the license agreements with Hampton
Inns, which will result in a material structural change in a Partnership or its
assets outside the ordinary course of business.
"Fleetwood Buy/Sell Notice" means a notice that the Icahn
Group has elected to exercise its Buy/Sell Right pursuant to and as provided in
Section 7.05, which notice shall contain and constitute an irrevocable offer by
Fleetwood, on behalf of the Icahn Group, to either (i) purchase all Interests,
all Member Units and all Member Loans Beneficially Owned by the Cayuga Group,
or (ii) sell to Cayuga all Interests, all Member Units and all Member Loans
Beneficially Owned by the Icahn Group, in either case for the same cash price
for each percentage point of Interests (the "Buy/Sell Price") specified by
Fleetwood in such notice, for the Imputed Unit Price per Member Unit and for
the principal amount of such Member Loans together with accrued interest
thereon through the Buy/Sell Closing. In order to be effective such notice must
be accompanied by evidence, reasonably satisfactory to the Cayuga Group, that
(i) Fleetwood has, and will continue to maintain, the Required Net Worth or
(ii) Fleetwood's obligations under Section 7.05(b) are guaranteed by an entity
which has, and will continue to maintain, the Required Net Worth.
"Fleetwood Member" means each Person who is both a member of
the Icahn Group and a Member.
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"Fleetwood Interests" means the Interests originally issued to
Fleetwood and any other Interests subsequently acquired by Fleetwood or any of
its Affiliates.
"Fleetwood Transfer Notice" means a written notice given by
Fleetwood to Cayuga indicating that a member of the Fleetwood Group intends to
make a transfer pursuant to Section 7.05(a)(ii), which notice shall specify in
detail the terms and conditions (including the proposed transferee) of the
proposed transfer.
"Follow-up Offer" means a Tender Offer for Units made by the
Company in response to a Competing Offer in accordance with the provisions of
Section 4.03(a)(i); provided that the terms and conditions (other than the
purchase price, which shall be determined by the Manager in its sole
discretion) of the Follow-up Offer shall be reasonable and customary under the
circumstances.
"Follow-up Offer Notice" means a written notice from the
Company to the Members notifying them that the Company intends to make a
Follow-up Offer, which notice shall set forth the material terms and conditions
of the Follow- up Offer.
"Future Hostile Offer" means a Tender Offer for Units which
(i) is Commenced after the expiration of the Offer by a Person that is not an
Affiliate of any Member and (ii) has a purchase price per Unit that is at least
35% of Net Asset Value; provided, however, that if the purchase price of the
Future Hostile Offer is increased prior to the Commencement of a Responsive
Offer or a Qualifying Offer, then such price increase shall be deemed to
constitute the Commencement of a new Future Hostile Offer for purposes of
Section 4.03.
"General Partner" means Xxxxxxxxxx Realty Company-85, a
California general partnership, which is the general partner of Growth Hotel
Investors and the managing general partner of Growth Hotel Investors II as of
the Effective Date.
"GP Exercise Notice" means a written notice to Cayuga and NPI
from Fleetwood that Fleetwood has elected to exercise the GP Transfer Option.
In order to be effective such notice must be accompanied by evidence,
reasonably satisfactory to the Cayuga Group, that (i) Fleetwood has, and will
continue to maintain, the Required Net Worth or (ii) Fleetwood's obligations
under Section 7.05(b) are guaranteed by an entity with the Required Net Worth.
"GP Interest" means, collectively, the general partner
interest in each Partnership held by the General Partner and any GP Units.
"GP Purchase Price" means an amount in cash equal to: the sum
of (i) the Imputed Unit Price multiplied by the number of GP Units owned by the
General Partner on the date of the GP Transfer Closing plus (ii) 175% of the
gross property management fees paid by the Partnership to all parties (other
than Hampton Inns, Inc. or one of its Affiliates) during the Partnerships' most
recently ended fiscal year preceding the Buy/Sell Closing with respect to
properties owned by the Partnerships and not sold or under contract for sale as
of the date of
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the GP Transfer Closing. The GP Purchase Price shall be computed and certified
by the Partnership's independent public accountants.
"GP Stock" means 100% of the issued and outstanding capital
stock of NPI Realty Management Corp., a Florida corporation and the co-general
partner with Fox Realty Investors, a California general partnership, in the
General Partner.
"GP Transfer Closing" has the meaning specified in Section
7.05(b)(v).
"GP Transfer Option" means the option, exercisable by
Fleetwood from and after the date (if ever) on which (i) Cayuga notifies (or is
deemed to have notified) Fleetwood pursuant to Section 7.05(b)(iii)(1) or (2)
that the Cayuga Group has elected to sell its Interests and Member Units
pursuant to a Fleetwood Buy/Sell Notice or (ii) any member of the Cayuga Group
has sold Interests or Member Units at a Buy/Sell Closing, to purchase the GP
Stock for the GP Purchase Price and in accordance with the provisions of
Section 7.05(b)(v).
"GP Units" means all Units owned of record by the General
Partner on the date hereof.
"Group" means a "partnership, limited partnership, syndicate
or other group" within the meaning of Section 13(d)(3) of the Exchange Act.
"Icahn" means Xxxx X. Icahn, an individual.
"Icahn Group" means, collectively, (i) Icahn, Fleetwood and
their respective Affiliates and (ii) each Person who is a direct or indirect
transferee of any Fleetwood Interests.
"Insignia" means Insignia Financial Group, Inc., a Delaware
corporation.
"Imputed Unit Price" means, in connection with any buy/sell
transaction, an amount in cash equal to the quotient of (A) the sum of (i) the
product of (a) the Buy/Sell Price times (b) one hundred percent of the
Interests plus (ii) all liabilities of the Company as of the Buy/Sell Notice
Date, minus (iii) all assets of the Company (other than the Company Units) as
of the Buy/Sell Notice Date, divided by (B) the total number of Company Units
as of the Buy/Sell Notice Date.
"Institutional Debt" means the indebtedness of the Company for
borrowed money due to PWRES and its successors and assigns.
"Interests" means the percentage of beneficial interests in
the profits and losses of the Company owned by the Members.
"Limited Partner" means a limited partner of a Partnership.
"Manager" has the meaning specified in Article VI.
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"Member Group" means the Cayuga Group or the Icahn Group, as
the case may be.
"Member Loans" has the meaning specified in Section 9.03(a).
"Member Units" means, with respect to any Member, all Units
Beneficially Owned by such Member, any Member of such Member's Member Group or
any Affiliate of any of the foregoing persons, other than (i) Company Units and
(ii) GP Units.
"NPI" means National Property Investors, Inc., a Delaware
corporation.
"Negotiated Purchase" means a purchase of Units by the Company
in a negotiated transaction.
"Net Asset Value" means, at any given time, the liquidation
value per Unit as determined by the Manager and set forth in the Offer
Documents for purposes of making an Offer.
"Noticed Group" means the Member Group of which the Noticed
Member is a member.
"Noticed Member" means, as applicable, (i) Cayuga, if it has
received a Fleetwood Buy/Sell Notice, or (ii) Fleetwood, if it has received a
Cayuga Buy/Sell Notice.
"Offer" means Tender Offers for Units to be made by the
Company pursuant to Section 4.02, as such Tender Offers may be amended and
supplemented from time to time.
"Offer Documents" means all documents relating to a Tender
Offer which are required to be filed with the Commission, including but not
limited to the Offer to Purchase and any supplements and amendments thereto,
and any press releases related thereto.
"Offering Group" means the Member Group of which the Offering
Member is a member.
"Offering Member" means, as applicable, (i) Cayuga, if it has
exercised its Buy/Sell Right and delivered a Cayuga Buy/Sell Notice to
Fleetwood pursuant thereto, or (ii) Fleetwood, if it has exercised its Buy/Sell
Right and delivered a Fleetwood Buy/Sell Notice to Cayuga pursuant thereto.
"Partnership" means either Growth Hotel Investors, a
California limited partnership, or Growth Hotel Investors II, a California
limited partnership, as the context may require.
"Partnership Agreement" means the Agreement of Limited
Partnership of a Partnership, as in effect on the Effective Date and as the
same may be amended from time to time after the Effective Date.
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"Person" means any natural person or any corporation,
partnership, venture, association or other entity.
"PWRES" means PaineWebber Real Estate Securities Inc.
"Qualified Purchase" means a purchase of Units by a Member or
Members in a negotiated transaction permitted to be made pursuant to Section
4.03(b)(iii), 4.03(b)(iv) or 4.03(b)(v), provided that the following conditions
are satisfied:
(i) the Qualified Purchase may only be made on
terms and conditions that are the same in all material
respects as the terms and conditions of the proposed
Negotiated Purchase set forth in the Unrestricted Purchase
Notice or the Restricted Purchase Notice, as the case may be,
that resulted in the right to make a Qualified Purchase
(except that the purchase price per Unit may be greater than
that stated in the Unrestricted Purchase Notice); and
(ii) prior to making the Qualified Purchase, the
Member or Members making the Qualified Purchase agree in
writing with the Company for the benefit of the other Members
(a) to register any Units purchased pursuant to such Qualified
Purchase on the books of the Partnership in the record name of
the Company, as nominee for such Member or Members, and (b)
that any Units so purchased by such Member or Members pursuant
to such Qualified Purchase and registered in the record name
of the Company shall be voted as provided in Section 4.07 and
shall be subject to the buy/sell provisions of Section
7.05(b).
"Qualifying Offer" means a Tender Offer for Units by a Member
or Members permitted to be made pursuant to Section 4.03(a), provided that the
following conditions are satisfied:
(i) the Member or Members making the Qualifying
Offer agree in writing with the Company for the benefit of the
other Members prior to the Commencement of the Qualifying
Offer (a) to register any Units purchased pursuant to such
Qualifying Offer on the books of the Partnership in the record
name of the Company, as nominee for such Member or Members,
and (b) that any Units so purchased by such Member or Members
pursuant to such Qualifying Offer and registered in the record
name of the Company shall be voted as provided in Section 4.07
and shall be subject to the buy/sell provisions of Section
7.05(b); and
(ii) the Member or Members making the Qualifying
Offer adequately disclose, in a manner reasonably acceptable
to counsel to the other Members, the agreements described in
clause (i) above and the effects thereof in the tender offer
documents relating to such Qualifying Offer sent to the
Limited Partners and filed with the Commission (if required to
be filed). Counsel to the other Members must provide its or
their comments to such disclosure within 24 hours after the
receipt thereof.
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"Redemption Amount" means (A) the aggregate amount of
contributions to the Company's capital made pursuant to this Agreement in
respect of Interests being redeemed, less any amounts paid by the Company to
Members by way of distributions in respect of such Interests, plus (B) the
product of (i) the number of Member Units being purchased, times (ii) 80.0% of
Net Asset Value. Anything in this Agreement to the contrary notwithstanding,
upon the election to Effect a Redemption with respect to any Member (the
"Redeemed Member"), the remaining Members shall provide for the release to the
Redeemed Member (or members of such Member's Member Group) of the collateral
(other than Member Units) with respect to which the Redeemed Member has granted
a security interest to PWRES pursuant to Section 9.03(c).
"Required Net Worth" means total assets (excluding goodwill)
less total liabilities of not less than $10 million.
"Responsive Offer" means a Tender Offer for Units made by the
Company in response to a Future Hostile Offer in accordance with the provisions
of Section 4.03(a)(ii), provided that the terms and conditions (other than the
purchase price, which shall be in the sole discretion of the Manager) of the
Responsive Offer shall be reasonable and customary under the circumstances.
"Responsive Offer Notice" means a written notice from the
Company to the Members notifying them that the Company intends to make a
Responsive Offer, which notice shall set forth the material terms and
conditions of the Responsive Offer.
"Restricted Purchase Notice" means a written notice from
Cayuga to Fleetwood or from Fleetwood to Cayuga, as the case may be, proposing
that the Company make a Negotiated Purchase that does not satisfy the criteria
set forth in clauses (1) and (2) of Section 4.03(b)(i), which notice must set
forth all of the material terms and conditions of the proposed Negotiated
Purchase, including without limitation the proposed number of Units to be
purchased and the proposed purchase price per Unit.
"Tender Offer" means a tender offer that is subject to Section
14(e) of the Exchange Act.
"Terms" means the following terms and conditions of a Tender
Offer: (i) the purchase price, (ii) the minimum and maximum number of Units to
be tendered for, (iii) the expiration date, and (iv) the conditions to the
Offer.
"Third Party" means, as to any Person, another Person that is
not an Affiliate or an Associate of the first Person.
"Third Party Proposal" means a proposal by a Person which is a
Third Party as to each Member Group to cause the Partnership to engage in an
Extraordinary Transaction.
"Third Party Proposal Trigger" means the distribution by a
Third Party to Limited Partners of proxy and/or consent solicitation materials
relating to a Third Party Proposal, if and only if within five Business Days of
the date such proxy and/or consent solicitation materials are
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first received by any member of the Cayuga Group, Cayuga does not notify
Fleetwood that Cayuga objects to the Third Party Proposal.
"Units" means units of limited partnership interest in a
Partnership.
"Unrestricted Purchase Notice" means a written notice from
Fleetwood to the Company proposing that the Company make a Negotiated Purchase
that satisfies the criteria set forth in clauses (1) and (2) of Section
4.03(b)(i), which notice must set forth all of the material terms and
conditions of the proposed Negotiated Purchase, including without limitation
the proposed number of Units to be purchased and the proposed purchase price
per Unit.
Section 1.02 Representations and Warranties of Cayuga.
Cayuga hereby represents and warrants to the Company and Fleetwood as follows:
(a) The Cayuga Group Beneficially owns no Units as of the
Effective Date. Partners in the Cayuga Group Beneficially Own Member Units
consisting of 1,076 Units of Growth Hotel Investors and Member Units consisting
of 2,941 Units of Growth Hotel Investors II as of the Effective Date. The
General Partner does not own any Units of record.
(b) [Intentionally omitted].
(c) None of the Partnership's contracts or other
transactions with any member of the Cayuga Group is, and any such contract or
other transaction entered into during the term of this Agreement will not be,
prohibited by a Partnership Agreement.
(d) For purposes of Section 3(c)(1) of the Investment
Company Act of 1940, as amended, as of the Effective Date, no more than 45
Persons shall be deemed to "own" (within the meaning of Section 3(c)(1))
Interests by reason of the Cayuga Group's ownership of Interests.
(e) Each Partnership's contracts with any member of the
Cayuga Group is, and any such contract entered into during the term of this
Agreement will be, terminable by such Partnership without premium or penalty
upon 60 days' prior notice.
(f) Cayuga has obtained, prior to the Effective Date, an
amendment to the partnership agreement of the General Partner which grants to
NPI Realty Management Corp. all rights as managing general partner of the
General Partner to conduct the affairs of the General Partner and each
Partnership.
Section 1.03 Representations and Warranties of Fleetwood.
Fleetwood hereby represents and warrants to the Company and Cayuga as follows:
(a) The Icahn Group Beneficially owns Member Units
consisting of 15 Units of Growth Hotel Investors and Member Units consisting of
55 Units of Growth Hotel Investors II as of the Effective Date.
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(b) For purposes of Section 3(c)(1) of the Investment
Company Act of 1940, as amended, as of the Effective Date, no more than 45
Persons shall be deemed to "own" (within the meaning of Section 3(c)(1))
Interests by reason of the Icahn Group's ownership of Interests.
ARTICLE II.
OFFICES
Section 2.01 Office. The office of the Company shall be
established and maintained at 000 Xxxxxxx Xxxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxx
Xxxx 00000.
Section 2.02 Other Offices. The Company may have other
offices, either within or without the State of New York, at such place or
places as the managing member (the "Manager") of the Company may from time to
time appoint or the business of the Company may require.
ARTICLE III.
PURPOSE
Section 3.01 Purpose. The Company was formed for the
purpose of engaging in any lawful act or activity for which general
partnerships may be organized under laws of the State of New York. While this
Agreement is in effect, the sole and exclusive purposes of the Company shall be
to acquire (including without limitation pursuant to an Offer), and thereafter
to hold for investment and ultimately dispose of, or otherwise realize the
value of, Units, and to conduct any other activities necessary or incidental to
such purposes including without limitation exercising any and all voting and
other rights appurtenant to the ownership of such Units.
ARTICLE IV.
STANDSTILL AND OFFER PROVISIONS
Section 4.01 Standstill Provisions.
(a) Subject to Sections 4.01(d) and 4.01(e) below and
except as provided in Section 4.03, no member of the Cayuga Group or the Icahn
Group shall (i) commence a Tender Offer for Units or (ii) purchase, buy,
acquire or otherwise become or seek to become the Beneficial Owner of Units (or
any other interest in the Partnership), in each case other than pursuant to the
Offer; provided, however, that the foregoing shall not prohibit (x) the
acquisition of Beneficial Ownership of Units by any member of the Cayuga Group
or the Icahn Group as a result of any acquisition of Units by the Company or,
(y) the acquisition by any member of the Cayuga Group or the Icahn Group of the
capital stock of or any other interest in any other member of the Cayuga Group
or the Icahn Group or (z) the Purchase by the Company from Cayuga of 1 Unit in
each Partnership at a price of $705 for the Unit in Growth Hotel Investors
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and $750 for the Unit in Growth Hotel Investors II which purchase is being
consummated simultaneously with the execution and delivery of this Agreement.
(b) Except as provided in Section 4.01(c) and in Section
4.07, any Member may, on behalf of the Company, exercise the Company's rights
as a Limited Partner with respect to the Company Units and any Member Units
registered in the name of the Company as nominee for such Member, including
without limitation the Company's rights to access the books and records of the
Partnership; provided, however, that no member of the Icahn Group may call or
initiate a Limited Partner meeting or consent solicitation; and further
provided that (i) from and after the date of a Buy/Sell Closing in which the
Cayuga Group sells its Interests and Member Units to Fleetwood (or its
designee), and so long as an Affiliate of NPI continues to be the General
Partner, the participation by such Affiliate of NPI in any activity with
respect to the Partnership (whether referred to in this Section 4.01(b) or
otherwise) shall be limited to activities of the General Partner required under
a Partnership Agreement or by the fiduciary obligations of such entity, and
(ii) from and after the date of the GP Transfer Closing, such Affiliate of NPI
shall also be prohibited from calling or initiating a Limited Partner meeting
or consent solicitation and from engaging in any other activity with respect to
a Partnership.
(c) No member of the Cayuga Group or the Icahn Group,
singly or as part of a Group, directly or indirectly, through one or more
intermediaries or otherwise, may: (i) make, or in any way participate in,
directly or indirectly, any "solicitation" of "proxies" (as such terms are
defined or used in Regulation 14A under the Exchange Act) or become a
"participant" in any "election contest" (as such terms are defined or used in
Rule 14a-11 of the Exchange Act) with respect to the Partnership; (ii)
initiate, propose or otherwise solicit Limited Partners for the approval of one
or more proposals with respect to a Partnership; or (iii) instigate or
encourage any Limited Partner or other Third Party to do any of the foregoing;
provided, however, that until a Buy/Sell Closing occurs, this Section 4.01(c)
shall not apply to members of the Cayuga Group with respect to the matters set
forth in clauses (i)-(iii) of Section 4.07(b); and further provided that (x)
from and after the date of a Buy/Sell Closing in which the Cayuga Group sells
its Interests and Member Units to Fleetwood (or its designee), and so long as
an Affiliate of NPI continues to be the General Partner, the participation by
such Affiliate of NPI in any activity with respect to a Partnership (whether
referred to in this Section 4.01(c) or otherwise) shall be limited to
activities required under the Partnership Agreement or by the fiduciary
obligations of such entity, and (y) from and after the date of the GP Transfer
Closing, such Affiliate of NPI shall also be prohibited from participating in
any activity referred to in this Section 4.01(c) and from engaging in any other
activity with respect to a Partnership.
(d) If at any time the only remaining Members are all
members of the same Member Group, then the provisions of this Section 4.01 and
Section 4.03(a)(vi) shall no longer apply to the members of such Member Group
or to any Person who thereafter becomes a Member.
(e) Notwithstanding anything in this Agreement to the
contrary, no Person shall be deemed to have violated this Section 4.01(a) in
the event that such Person acquires Beneficial Ownership of Units representing
a de minimis amount of the total outstanding Units pursuant to a transaction in
which such Person acquires an interest in another entity; provided that (i) the
purpose of such transaction is not to acquire Units or otherwise circumvent the
intent
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of this Agreement, and (ii) if such acquisition occurs while such Person or any
of its Affiliates is a member of a Member Group, then promptly after such
acquisition such Person shall register such Units on the books of the
Partnership in the record name of the Company, as nominee for such Person, and
such Units shall constitute Member Units for purposes of this Agreement.
(f) It is understood and agreed that except as provided
in Section 4.02(a), the obligations of the Members (and any Person who becomes
a Member) and the members of their respective Member Groups under the
provisions of this Section 4.01 shall survive (i) termination or modification
of this Agreement, (ii) termination (by sale, assignment, redemption or
otherwise) of any Member's Beneficial Ownership of Interests, (iii) termination
or dissolution of the Company, and (iv) termination of such Person as a Member.
Section 4.02 The Offer.
(a) The Offer shall initially be made upon the Terms
mutually agreed upon by the Members. The Members acknowledge that they have
agreed to the Terms contained in the draft dated February 13, 1996 of the Offer
Documents. If the Members are unable to agree on any additional Terms of the
Offer within 20 days of the Effective Date, then, notwithstanding any other
provision of this Agreement to the contrary, the provisions of Section 4.01
shall be void and of no effect, and the Manager shall liquidate and dissolve
the Company as soon as practicable. All terms and conditions other than the
Terms of the Offer (including any supplements and amendments thereto) shall be
determined by the Manager, provided that such other terms and conditions must
be reasonable and customary under the circumstances. Each Member shall provide
all information reasonably requested by the Company to complete the Offer
Documents and consummate the Offer. Immediately following the Closing Date,
the Company shall take all actions as are necessary for it to be admitted to
the Partnership as a substitute Limited Partner as to all of the Units
purchased pursuant to the Offer.
(b) Except as provided in Section 4.02(c) below, any
amendment to the Terms of the Offer after the Offer has been Commenced must be
approved by all Members; provided, however, that only the Manager need approve
any extension of the expiration date of the Offer which, in the opinion of
legal counsel to the Company in connection with the Offer, (i) is required by
the Exchange Act and the rules and regulations thereunder or by the Commission
or (ii) is otherwise advisable under the circumstances.
(c) If a Competing Offer has been Commenced, then the
Manager may, in its sole discretion, increase the purchase price of the Offer
from time to time; provided, however, that the purchase price of the Offer may
not be increased to an amount that is greater than 110% of the purchase price
of the Competing Offer at the time of any such increase. If the purchase price
of the Offer is to be increased pursuant to this Section 4.02(c), then, within
two Business Days of the receipt by Fleetwood of notice of a Competing Offer,
Fleetwood, on behalf of all Fleetwood Members, shall elect whether or not to
fund the Fleetwood Members' pro rata share of the Offer Call amount to be
specified in a properly issued Capital Call Notice. If Fleetwood shall elect
not to so fund, the Company shall be required to Effect a Redemption with
respect to the Icahn Group.
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(d) If (i) a Competing Offer has been Commenced, (ii)
Fleetwood (on behalf of all Fleetwood Members) proposes in writing to Cayuga
(on behalf of all Cayuga Members) to increase the purchase price of the Offer
to a price that is at least equal to, but not greater than 110% of, the
purchase price of the Competing Offer, and (iii) Cayuga does not agree within
two Business Days after Fleetwood's request to increase the purchase price of
the Offer, then the Company shall continue to make the Offer on unchanged terms
and Fleetwood may elect within two Business Days following the expiration of
the two Business Day period referred to in the foregoing clause (iii) to
require the Company to Effect a Redemption in respect of the Icahn Group, in
which case all members of the Icahn Group will continue to be subject to the
provisions of Section 4.01. If Cayuga agrees to the increase in the purchase
price of the Offer proposed by Fleetwood within such two Business day period,
then the Manager shall take such action as is reasonably necessary to amend the
Offer and effect such price increase.
(e) The Xxxxxx Group, Inc. will be retained to act as
depositary (the "Depositary") for each Offer on such terms as the Manager in
its sole discretion shall determine. In addition, the Depositary will be
reimbursed for its reasonable out-of-pocket expenses incurred in connection
with each Offer.
Section 4.03 Future Purchases of Units by the Company and
Members.
(a) Tender Offers.
(i) If a Competing Offer has been Commenced and
if within 48 hours of the Closing Date the Manager determines
that the Company should make a Follow-up Offer, then (1)
within 48 hours of the Closing Date the Company shall provide
Fleetwood with a Follow-up Offer Notice, and (2) within three
Business Days after the Closing Date the Company shall
Commence a Follow-up Offer; provided, however, that if the
Competing Offer is withdrawn prior to the Commencement of the
Follow-up Offer, then the Company shall not Commence a
Follow-up Offer. If the Company makes a Follow-up Offer in
accordance with the preceding sentence, then, by written
notice to the Company given on or prior to the second Business
Day following the date of receipt by Fleetwood of a notice
relating to such Follow-up Offer and specifying the purchase
price to be paid, Fleetwood, on behalf of all Fleetwood
Members, shall elect whether or not to fund the Fleetwood
Members' pro rata share of the Offer Call amount to be
specified in a properly issued Capital Call Notice. If
Fleetwood shall elect not to so fund, the Company shall be
required to Effect a Redemption with respect to the Icahn
Group. Immediately following the date on which the Company
accepts for payment Units validly tendered pursuant to the
Follow-up Offer, the Company shall take all actions as are
necessary for it to be admitted to the Partnership as a
substitute Limited Partner with respect to all such Units
accepted for payment.
(ii) If a Future Hostile Offer is Commenced and if
within five Business Days of the date on which the Future
Hostile Offer is Commenced the Manager determines that the
Company should make a Responsive Offer, then (1) within such
five Business Day period the Company shall issue a press
release (which
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may omit information relating to the number of Units to be
tendered for, the purchase price of the Responsive Offer and
any other information counsel to the Company deems necessary
in order to prevent the issuance of such press release from
constituting the Commencement of a Tender Offer under Rule
14d- 2 of the Exchange Act) announcing the Company's intention
to make a Responsive Offer, (2) within two Business Days
following the issuance of such press release the Company shall
provide Fleetwood with a Responsive Offer Notice, and (3) the
Company shall Commence a Responsive Offer within ten Business
Days of the date on which the Future Hostile Offer is
Commenced; provided, however, that if the Future Hostile
Offer is withdrawn prior to the Commencement of the Responsive
Offer, then the Company shall not Commence a Responsive Offer.
If the Company makes a Responsive Offer, then, by written
notice to the Company given on or prior to the next Business
Day following the date of receipt by Fleetwood of a notice
relating to such Responsive Offer and specifying the purchase
price to be paid, Fleetwood, on behalf of all Fleetwood
Members, shall elect whether or not to fund the Fleetwood
Members' pro rata share of the Offer Call amount to be
specified in a properly issued Capital Call Notice. If
Fleetwood shall elect not to fund then (i) if such Responsive
Offer has a purchase price per Unit equal to or less then 80%
of Net Asset Value, the Company shall be required to Effect a
Redemption with respect to the Icahn Group or (ii) if such
Responsive Offer has a purchase price per Unit greater than
80% of Net Asset Value, the Company shall not proceed with a
Responsive Offer and the Cayuga Group shall be permitted to
Commence a Qualifying Offer prior to the withdrawal or
expiration of the Future Hostile Offer or within fifteen
Business Days of the date on which the Future Hostile Offer is
Commenced (but prior to the withdrawal of such Future Hostile
Offers). Immediately following the date on which the Company
accepts for payment Units validly tendered pursuant to the
Responsive Offer, the Company shall take all actions as are
necessary for it to be admitted to the Partnership as a
substitute Limited Partner with respect to all such Units
accepted for payment.
(iii) If (1) the Company does not provide Fleetwood
with a Follow-up Offer Notice within the 48 hour period
referred to in Section 4.03(a)(i)(1), (2) the Company does not
Commence a Follow-up Offer within three Business Days after
the Closing Date (other than as a result of the fact that the
Competing Offer was withdrawn), (3) the Company does not issue
a press release announcing the Company's intention to make a
Responsive Offer within five Business Days following the date
on which a Future Hostile Offer is Commenced, or (4) the
Company does not Commence a Responsive Offer (other than as a
result of the fact that the Future Hostile Offer was withdrawn
within ten Business Days of the date on which a Future Hostile
Offer is Commenced), then, in any such case, the Company shall
not make a Follow-up Offer or a Responsive Offer, as the case
may be, and the Fleetwood Members shall be permitted to
Commence a Qualifying Offer prior to the withdrawal or
expiration of the Competing Offer or within fifteen Business
Days of the date on which the Future Hostile Offer is
Commenced (but prior to the withdrawal of such Future Hostile
Offer), as the case may be; provided, however, that if clause
(2) or clause (4) gives rise to the
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right to make a Qualifying Offer, then the Cayuga Members also
shall be permitted to make a Qualifying Offer if the reason
that the Company did not Commence a Follow-up Offer within two
Business Days after the Closing Date or a Responsive Offer
within ten Business Days after the Commencement of the Future
Hostile Offer, as the case may be, was outside the control of
the Company, the Manager, and any member of the Cayuga Group.
The Company shall promptly provide a Member who makes a
Qualifying Offer with all information relating to the Company
reasonably requested by such Member in connection with such
Qualifying Offer.
(iv) Immediately following the date on which the
Member or Members making a Qualifying Offer accepts for
payment Units validly tendered pursuant to such Qualifying
Offer, the Company shall take all actions as are necessary for
it to be admitted to the Partnership as a substitute Limited
Partner with respect to all Units purchased by such Member or
Members (and registered in the record name of the Company)
pursuant to the Qualifying Offer.
(v) The Company shall take all action reasonably
necessary to ensure that any distribution received by the
Company in respect of any Units purchased pursuant to a
Qualifying Offer and registered in the record name of the
Company as a result of a Qualifying Offer is received by the
Member or Members for whom the Company is the nominee with
respect to such Units as promptly as practicable after receipt
thereof by the Company.
(vi) The Company and the Members covenant and
agree that other than as provided in (i), (ii) and (iii)
above, none of the Company, the Members or any of their
respective Affiliates may Commence a Tender Offer for Units
after the expiration of the Offer.
(b) Negotiated Purchases.
(i) Without the consent of Fleetwood, the Company
may make a Negotiated Purchase provided each of the following
conditions are met:
(1) the number of Units purchased by the
Company in the Negotiated Purchase, together with all
other Units purchased by the Company in prior
Negotiated Purchases, does not exceed 10% of the
total number of Units purchased by the Company
pursuant to the Offer and any subsequent Tender Offer
for Units by the Company; and
(2) the price per Unit paid by the
Company in the Negotiated Purchase does not exceed
80.0% of the Net Asset Value.
(ii) The Company may make a Negotiated Purchase
that does not satisfy the criteria set forth in clauses (1)
and (2) of (i) above if Fleetwood consents to such Negotiated
Purchase.
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(iii) If Fleetwood provides an Unrestricted
Purchase Notice to the Company and the Manager does not
consent to the proposed Negotiated Purchase that is the
subject of the Unrestricted Purchase Notice within three days
of the date the Unrestricted Purchase Notice is received, then
the Fleetwood Members shall be permitted to make a Qualified
Purchase. The Company shall take all action reasonably
necessary to ensure that any distribution received by the
Company in respect of any Units registered in the record name
of the Company pursuant to this Section 4.03(b)(iii) is
received by the Fleetwood Members for whom the Company is the
nominee with respect to such Units as promptly as practicable
after receipt thereof by the Company.
(iv) If Fleetwood provides a Restricted Purchase
Notice to Cayuga and Cayuga does not consent in writing to the
proposed Negotiated Purchase by the Company that is the
subject of the Restricted Purchase Notice within three days of
the date the Purchase Notice is received, then the Fleetwood
Members shall be permitted to make a Qualified Purchase. The
Company shall take all action reasonably necessary to ensure
that any distribution received by the Company in respect of
any Units registered in the record name of the Company
pursuant to this Section 4.03(b)(iv) is received by the
Fleetwood Member or Fleetwood Members for whom the Company is
the nominee with respect to such Units as promptly as
practicable after receipt thereof by the Company.
(v) If Cayuga provides a Restricted Purchase
Notice to Fleetwood and Fleetwood does not consent in writing
to the proposed Negotiated Purchase by the Company that is the
subject of the Restricted Purchase Notice within three days of
the date the Purchase Notice is received, then the Cayuga
Members shall be permitted to make a Qualified Purchase. The
Company shall take all action reasonably necessary to ensure
that any distribution received by the Company in respect of
any Units registered in the record name of the Company
pursuant to this Section 4.03(b)(v) is received by the Cayuga
Member or Cayuga Members for whom the Company is the nominee
with respect to such Units as promptly as practicable after
receipt thereof by the Company.
Section 4.04 Members' Review of Offer Documents. Each
Member shall have the right to review in a timely manner all of the Offer
Documents and to comment upon the Offer Documents, which comments shall be
given due consideration by the Manager. If a Fleetwood Member requests that
the Manager modify or add disclosure in the Offer Documents relating to such
Fleetwood Member and the Manager does not modify or add such disclosure as
requested, then the indemnity obligations of such Fleetwood Member under
Article VIII of this Agreement shall not apply to any loss, claim, damage or
liability that results from the Manager's failure to make such requested
modification or addition.
Section 4.05 Public Announcements. Subject to the
requirements of applicable law, rule, regulation or order, no Member shall make
any public announcement with respect to the Offer or any of the transactions or
events incidental to the commencement, continuance or consummation of the Offer
without the prior written consent of the other Members, which consent shall not
be unreasonably withheld or delayed, provided that, to the extent disclosure
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is required by law, rule, regulation or order, each Member shall use reasonable
efforts, consistent with its legal obligations, to submit the form of proposed
disclosure to the other Members and permit the other Members a reasonable
opportunity to comment thereon prior to publication.
Section 4.06 Litigation.
(a) All litigation which in any way arises out of or
relates to the Offer or any other purchase of Units by the Company, whether
pursuant to a Tender Offer or in a Negotiated Purchase, shall be exclusively
controlled by the Manager, including the selection of counsel for the Company
and the Members (which counsel shall be reasonably acceptable to all Members),
and all costs and expenses related to that litigation, including costs of
settlement, shall be paid by the Company; provided, however, that any Member or
member of the Cayuga Group or the Icahn Group may retain its own counsel at its
own expense and, if such Member or member so elects, may be represented by its
own counsel in any such litigation and may control any aspect of such
litigation relating solely to such Member or member of the Cayuga Group and its
Affiliates (other than the Company) or the Icahn Group and its Affiliates
(other than the Company), as the case may be. The foregoing provisions shall
apply notwithstanding that the defendants in the litigation are Persons other
than the Company or its Members. Under no circumstances will the Manager or
the Company agree to any settlement of litigation unless as part of that
settlement each Member and all of their respective members or Affiliates named
as defendants receive unconditional releases of liability relating to the
allegations in the complaint in such litigation.
(b) If within 10 days after being advised of the terms of
any litigation settlement Fleetwood objects to the settlement and the Manager
declines to modify the terms of that settlement in a manner reasonably
acceptable to Fleetwood, then Fleetwood may elect to require the Company to
Effect a Redemption with respect to the Icahn Group, and the Company and the
remaining Members will be fully responsible for all costs and liability
associated with the litigation, except only for costs and liabilities for which
the Fleetwood Members are required to furnish indemnity under Section 8.03.
Section 4.07 Voting of Partnership Units.
(a) Subject to the provisions of Section 4.07(b) below,
(i) the Company Units shall be voted (or waivers or written consents in respect
thereof shall be executed) by the Company as directed by the Members in
proportion to their respective interests in the Company, and (ii) the Member
Units shall be voted (or waivers or written consents in respect thereof shall
be executed) as directed by the Person or Persons for whom the Company is the
nominee with respect to such Units.
(b) Subject to the provisions of Section
7.05(b)(v)(4)(C), until a Buy/Sell Closing occurs, and unless Cayuga is in
material default hereunder, the Company Units and the Member Units shall be
voted as directed by the Manager:
(i) on any proposal to remove the General Partner
or any proposal that in any way adversely alters the rights,
authority or obligations of the General
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Partner, or to reduce any compensation payable to the General
Partner or Affiliate of Cayuga;
(ii) on any proposal to cause the Partnership to
engage in an Extraordinary Transaction; provided, however,
that if such proposal is a Third Party Proposal or is proposed
by a general partner of the Partnership (other than the
General Partner) and such proposal does not result in a
Buy/Sell Trigger exercisable by Fleetwood on behalf of the
Icahn Group, then the Company Units shall be voted against the
Third Party Proposal or such proposal by a general partner and
Cayuga shall, and shall cause its Affiliates (other than the
General Partner) to, take such action as is reasonably
necessary under the circumstances to defeat such Third Party
Proposal or such proposal by a general partner; and
(iii) on any proposal made by the General Partner
of the Partnership.
ARTICLE V.
MEMBERS
Section 5.01 Place of Meetings. Meetings of the Members
of the Company shall be held at such place, either within or without the State
of New York, as may from time to time be designated by the Manager and stated
in a notice of meeting or in a duly executed waiver of notice thereof.
Section 5.02 Annual Meeting. An annual meeting of the
Members of the Company for the election of the Manager and for the transaction
of such other business as may properly come before the meeting shall be held
annually at such time as may be designated by the Manager and stated in the
notice of meeting or waiver of notice thereof.
Section 5.03 Special Meetings. Special meetings of the
Members, to be held for such purpose or purposes as may be specified in the
notice of meeting, may be called by the Manager or by any Member.
Section 5.04 Notice of Meetings; Waiver.
(a) Written notice of the date, hour, place and purpose
or purposes of every meeting of Members shall be delivered as provided in
Section 10.9 by the Manager (in the case of an annual meeting) or by the Member
calling the meeting (in the case of a special meeting), or by such person as
the foregoing may designate to perform this duty, not more than 60 days nor
less than five days before the meeting, to each Member of record entitled to
vote at such meeting.
(b) Notwithstanding the provisions of Section 5.04(a),
each person who is entitled to notice of any meeting of Members shall be deemed
to have waived such notice if the Member attends such meeting in person or by
proxy, or if the Member, before or after the meeting, submits a signed waiver
of such notice to the Company. When a meeting of Members is adjourned to
another time and place, unless the Manager after the adjournment shall fix a
new
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record date for such adjourned meeting or the adjournment is for more than 30
days, notice of such adjourned meeting need not be given if the time and place
to which such meeting has been adjourned was announced at the meeting at which
the adjournment was taken.
Section 5.05 Quorum. Unless otherwise required by law,
the presence in person or represented by proxy, of all of the Members thereat
shall be necessary to constitute a quorum for the transaction of business at
any meeting of Members. In the absence of a quorum at any such meeting or any
adjournment or adjournments thereof, a majority in voting interest of those
present in person or represented by proxy may adjourn such meeting from time to
time until a quorum is present thereat. At any adjourned meeting at which a
quorum is present any business may be transacted which might have been
transacted at the meeting as originally called.
Section 5.06 Voting; Proxies.
(a) Each Member shall be entitled to one vote for each
percentage point of Interests held in its name according to the membership
interest ledger of the Company and may vote either in person or by proxy with
respect to any matter submitted to a vote of the Members. Every proxy must be
in writing and executed by the Member or by his duly authorized
attorney-in-fact, in which case the Company may request the delivery of the
original power of attorney as a condition of honoring such proxy. A proxy with
respect to Interests held in the name of two or more persons shall be valid if
executed by any one of them unless at or prior to exercise of the proxy the
Company receives written notice to the contrary from any one of such persons.
No proxy shall be valid after a period of three years from the date thereof
unless otherwise provided in such proxy.
(b) The following actions shall require the unanimous
approval of all Members: (i) authorization and sales of additional Interests
or other rights or interests in the Company; and (ii) amendments to this
Agreement. In addition, all other actions not specifically contemplated by
this Agreement to be taken by the Manager or the Company shall require the
unanimous approval of all Members, and no Member (other than Cayuga acting in
its capacity as Manager pursuant to the express terms of this Agreement) shall
have the authority to or shall take any action on behalf of the Company without
the written approval of all Members. Unless demanded by a Member present in
person or represented by proxy at any meeting of the Members, the vote thereat
may be by voice vote and need not be by ballot. Upon a demand by any such
Member for a vote by ballot on any question, or at the direction of such
chairman that a vote by ballot be taken on any question, such vote shall be
taken. On a vote by ballot each ballot shall be signed by the Member voting,
or by his proxy as such if there be such proxy, and it shall show the number of
Interests voted by such Member or proxy.
Section 5.07 Consent of Members in Lieu of Meeting. Any
action permitted or required to be taken by vote at any meeting of the Members
may be taken without a meeting upon the receipt by the Company of the written
consent of all Members entitled to vote thereon; provided, that such written
consent shall set forth the action so consented to.
Section 5.08 Continuation on Withdrawal of a Member. The
Company's existence will automatically terminate 90 days following the death,
retirement, resignation,
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expulsion, bankruptcy or dissolution of a Member or the occurrence of any event
which terminates the continued membership of a Member in the Company (each, a
"Withdrawal"), unless there are at least two remaining Members and the
remaining Members agree to continue the Company by unanimous written consent
within 90 days after the Withdrawal of a Member. In order to permit the
continuation of the Company's existence in the event only one Member would
otherwise be remaining, Interests may be transferred immediately to any Person
approved by such remaining Member so that there are two Members to make the
election contemplated in the preceding sentence. In the event of a Withdrawal
of a Member, other than a Withdrawal resulting from a transfer of Interests
permitted by Section 7.05, the Company may elect to Effect a Redemption with
respect to the Member Group of which such Member is a member.
ARTICLE VI.
MANAGER
Section 6.01 Number and Powers.
(a) There shall be only one Manager of the Company, and
the affairs of the Company shall be managed by the Manager to the limited
extent specifically contemplated in this Agreement. The Members hereby agree
that the initial Manager shall be Cayuga.
(b) The Manager shall hold office until the expiration of
his term and the election and qualification of his successor. The powers of
the Manager shall be limited to those contemplated by this Agreement.
Section 6.02 Election and Qualifications. So long as any
member of the Cayuga Group Beneficially Owns any Interests and subject to
clause (ii) of the second sentence of Section 6.04, the Manager shall be
elected by Cayuga; thereafter the Manager shall be elected by 100% of the votes
cast at a meeting of the Members duly called and held. Except as provided in
Section 6.01 and this Section 6.02, the Manager shall be elected at the Annual
Meeting of Members to hold office until the next Annual Meeting of Members and
until his successor has been elected and shall have qualified.
Section 6.03 Vacancies. Any vacancy in the position of
Manager, whether caused by resignation, death, disqualification, or removal of
the Manager or otherwise, may be filled as provided in the first sentence of
Section 6.02.
Section 6.04 Resignation or Removal. The Manager may
resign at any time and such resignation shall take effect upon receipt thereof
by the Members unless otherwise specified in the resignation. The Manager may
be removed either (i) by vote of a majority of the Interests owned by Members
entitled to elect or designate such Manager, with or without Cause, or (ii) by
vote of 33 1/3% of the outstanding Interests for Cause. For purposes of this
Agreement, "Cause" shall be defined as (i) fraud, dishonesty or willful
misconduct, (ii) the commission of theft, embezzlement, obtaining funds or
property under false pretenses, or similar acts of misconduct with respect to
the property of the Company or its employees or (iii) conviction of a felony.
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Section 6.05 Compensation. The Manager may receive
compensation for services to the Company only to the extent approved by all
Members or as otherwise set forth in this Agreement.
ARTICLE VII.
CONTRIBUTIONS OF CAPITAL; INTERESTS; TRANSFERS OF INTERESTS
Section 7.01 Contributions. Each Member shall contribute
to the Company the amount of cash set forth on Schedule I to this Agreement
(the "Initial Contribution") in exchange for the amount of Interests set forth
opposite such Member's name on Schedule I. As set forth in Section 7.06,
Members will be required from time to time to make additional capital
contributions.
Section 7.02 [Intentionally Omitted]
Section 7.03 [Intentionally Omitted]
Section 7.04 [Intentionally Omitted]
Section 7.05 Transfers of Interests.
(a) Voluntary Transfers.
(i) Except as otherwise provided in this
Agreement, no Member and no transferee of a Member's Interests
may directly or indirectly sell, assign, transfer, exchange,
encumber or otherwise dispose of Beneficial Ownership of any
Interests or any interest therein now held or hereafter
acquired by a Member; provided, however, that (1) any Member
may transfer all or any part of its Interests to another
Member; (2) any Member may transfer Interests to another
member of such Member's Member Group who agrees in a written
amendment to this Agreement to become a Member and thus be
bound by the provisions of this Agreement, provided that any
such transfer does not result in a reduction in the indirect
Beneficial Ownership by Icahn of the Fleetwood Interests or
any reduction in the indirect Beneficial Ownership by the
Cayuga Group (as defined in clause (i) and (ii) of the
definition of the Cayuga Group) of the Cayuga Interests, and
(3) transfers of interests in an entity that Beneficially Owns
Interests shall not constitute assignments or transfers of
Interests in violation of this provision, provided that any
such transfer does not result in a reduction in the indirect
Beneficial Ownership by Icahn of the Fleetwood Interests or a
reduction in the indirect Beneficial Ownership by the Cayuga
Group (as defined in clause (i) and (ii) of the definition of
the Cayuga Group) of the Cayuga Interests; and further
provided that notwithstanding anything to the contrary in this
Agreement, (x) no direct or indirect transfer of Interests by
any Person shall be deemed to occur by reason of any direct or
indirect transfer of the capital stock or other security of
Insignia, including without limitation any transfer of the
capital stock or other security of Insignia pursuant to a
merger, consolidation or other
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extraordinary corporate transaction to which Insignia or any
of its subsidiaries is a party, (y) it is expressly understood
and agreed by the Members that nothing in this Agreement shall
prohibit any Interests that are Beneficially Owned by a Member
from being pledged to collateralize or otherwise support
general corporate obligations of such Member or its Affiliates
existing on the Effective Date or incurred during the term of
this Agreement, in either case in the ordinary course of
business, but that the foregoing shall not relieve any Member
from its obligation to fully perform its undertakings in this
Agreement and (z) no direct or indirect transfer by any Person
shall be deemed to occur by reason of any transfer of any
interest in an entity that Beneficially Owns Interests to
partners, employees or Affiliates of Apollo Real Estate
Advisors, L.P.
(ii) A transfer that would otherwise be prohibited
by paragraph (i) of this Section 7.05(a) nonetheless may be
effected by a member of the Cayuga Group if at least 16 but
not more than 60 days prior to the date of such transfer
Fleetwood receives a Cayuga Transfer Notice; provided,
however, that if Fleetwood properly exercises its Buy/Sell
Right in respect of such Cayuga Transfer Notice as provided in
Section 7.05(b), then such transfer may not be consummated
until after the Buy/Sell Closing has occurred.
(iii) A transfer that would otherwise be prohibited
by paragraph (i) of this Section 7.05(a) nonetheless may be
effected by a member of the Icahn Group if at least 16 but not
more than 60 days prior to the date of such transfer Cayuga
receives a Fleetwood Transfer Notice; provided, however, that
if Cayuga properly exercises its Buy/Sell Right in respect of
such Fleetwood Transfer Notice as provided in Section 7.05(b),
then such transfer may not be consummated until after the
Buy/Sell Closing has occurred.
(b) Buy/Sell Provisions.
(i) Buy/Sell Triggers. Each of the following
events constitutes a Buy/Sell Trigger:
(1) the expiration of a 10-day period
following the filing by a Partnership with the
Commission of each Annual Report on Form 10-K or
10-KSB, beginning six months after the filing (or
deemed filing) of the Report for the Partnership's
fiscal year ending in 1996; provided, however, that
if for any reason the Partnership is not required to
file an Annual Report on Form 10-K or 10-KSB with the
Commission, then for purposes of this Buy/Sell
Trigger the Company shall be deemed to have filed
such Report on the 90th day following the last day of
the applicable fiscal year of the Partnership; and
further provided that if a Partnership is required to
file an Annual Report with the Commission but does
not timely file such Report (including any applicable
extension under Rule 12b-25 under the Exchange Act),
then for purposes of this Buy/Sell Trigger the
Company shall be deemed to have filed such Report on
the 105th day following the last day of the
applicable fiscal year of the
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Partnership (either party may exercise a Buy/Sell
Right under this Section);
(2) the giving of a notice (an
"Objection Notice") by Fleetwood to Cayuga to the
effect that Fleetwood opposes (x) any proposal made
by the General Partner or any member of the Cayuga
Group that is to be submitted to a vote of the
Limited Partners (whether such vote is to be taken at
a meeting or by written consent) or (y) any Third
Party Proposal or any proposal by a general partner
of a Partnership (other than the General Partner)
with respect to which the General Partner does not
take a neutral position or recommend that Limited
Partners vote against, which Objection Notice must be
given by Fleetwood not later than the 15th day after
Cayuga first gives Fleetwood written notice of the
proposed vote (which written notice shall be given by
Cayuga as promptly as practicable); provided,
however, that no Buy/Sell Trigger shall be deemed to
have occurred if, within 15 days after receipt by
Cayuga of an Objection Notice from Fleetwood, the
proposal that is the subject matter of the Objection
Notice is withdrawn; and further provided that the
giving of an Objection Notice shall result in a
Buy/Sell Right exercisable only by Fleetwood on
behalf the Icahn Group;
(3) the expiration of a Responsive
Offer; provided, however, that the expiration of a
Responsive Offer shall result in a Buy/Sell Right
exercisable only by Fleetwood on behalf of the Icahn
Group;
(4) a Third Party Proposal Trigger;
provided, however, that a Third Party Proposal
Trigger shall result in a Buy/Sell Right exercisable
only by Fleetwood on behalf of the Icahn Group;
(5) the receipt by Fleetwood of a Cayuga
Transfer Notice; provided, however, that the receipt
by Fleetwood of a Cayuga Transfer Notice shall result
in a Buy/Sell Right exercisable only by Fleetwood on
behalf of the Icahn Group;
(6) the receipt by Cayuga of a Fleetwood
Transfer Notice; provided, however, that the receipt
by Cayuga of a Fleetwood Transfer Notice shall result
in a Buy/Sell Right exercisable only by Cayuga on
behalf of the Cayuga Group;
(7) the occurrence of a material default
by a Cayuga Member under this Agreement, which
default continues uncured or unwaived for a period of
15 consecutive days; provided, however, that such
default shall result in a Buy/Sell Right exercisable
only by Fleetwood on behalf the Icahn Group;
(8) the occurrence of a material default
by a Fleetwood Member under this Agreement, which
default continues uncured or
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unwaived for a period of 15 consecutive days;
provided, however, that such default shall result in
a Buy/Sell Right exercisable only by Cayuga on behalf
the Cayuga Group;
(9) the receipt by the Company of
written notice from the holder of the Institutional
Debt advising the Company of the occurrence of any
event of default which permits such holder to
accelerate the payment of all indebtedness
thereunder; provided, however, that such default
shall result in a Buy/Sell Right exercisable by
either Cayuga on behalf of the Cayuga Group or
Fleetwood on behalf of the Icahn Group (A) unless
such default relates to an act or omission of any
member of the Cayuga Group, acting in any capacity,
in which case the Buy/Sell Right may not be exercised
by the Cayuga Group or (B) unless such default
relates to an act or omission of any member of the
Icahn Group, acting in any capacity, in which case
the Buy/Sell Right may not be exercised by the Icahn
Group;
(10) the termination of all license
agreements between the Partnerships and Hampton Inns,
Inc.; provided, however, that such event shall result
in a Buy/Sell Right exercisable only by Fleetwood on
behalf of the Icahn Group.
(ii) Buy/Sell Elections.
(1) Within 15 days after any Buy/Sell
Trigger that results in a Buy/Sell Right exercisable
by Fleetwood, Fleetwood may exercise its Buy/Sell
Right by delivering a Fleetwood Buy/Sell Notice to
Cayuga; provided, however, that if the Company has
purchased Units pursuant to a Responsive Offer or a
Negotiated Purchase, or a Member or Members have
purchased Units pursuant to a Qualified Purchase or a
Qualifying Offer, in either case within the six-month
period immediately preceding the date of any Buy/Sell
Trigger and the number of Units purchased by the
Company pursuant to the Responsive Offer or
Negotiated Purchase exceeds 10% of the number of
Units owned by the Company immediately prior to the
expiration of the Responsive Offer or the closing of
the Negotiated Purchase, or the number of Units
purchased by the Member or Members pursuant to a
Qualified Purchase or a Qualifying Offer exceeds 10%
of the number of Units owned by such Member or
Members immediately prior to the closing of the
Qualified Purchase or the Qualifying Offer, then for
purposes of this paragraph the date of such Buy/Sell
Trigger will deemed to be the date that is 186 days
following the date on which Units are paid for by the
Company pursuant to the Responsive Offer or the
Negotiated Purchase or paid for by the Member or
Members pursuant to the Qualified Purchase or the
Qualifying Offer.
(2) Within 15 days after any Buy/Sell
Trigger that results in a Buy/Sell Right exercisable
by Cayuga, Cayuga may exercise its Buy/Sell
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Right by delivering a Cayuga Buy/Sell Notice to
Fleetwood; provided, however, that if the Company has
purchased Units pursuant to a Responsive Offer or a
Negotiated Purchase, or a Member or Members have
purchased Units pursuant to a Qualified Purchase or a
Qualifying Offer, in either case, within the
six-month period immediately preceding the date of
any Buy/Sell Trigger and the number of Units
purchased by the Company pursuant to the Responsive
Offer or Negotiated Purchase exceeds 10% of the
number of Units owned by the Company immediately
prior to the expiration of the Responsive Offer or
the closing of the Negotiated Purchase, or the number
of Units purchased by the Member or Members pursuant
to a Qualified Purchase or a Qualifying Offer exceeds
10% of the number of Units owned by such Member or
Members immediately prior to the closing of the
Qualified Purchase or the Qualifying Offer, then for
purposes of this paragraph the date of such Buy/Sell
Trigger will deemed to be the date that is 186 days
following the date on which Units are paid for by the
Company pursuant to the Responsive Offer or the
Negotiated Purchase or paid for by the Member or
Members pursuant to the Qualified Purchase or the
Qualifying Offer.
(3) Notwithstanding the foregoing,
Cayuga shall not be entitled to give a Cayuga
Buy/Sell Notice if Cayuga has already received a
Fleetwood Buy/Sell Notice, and Fleetwood shall not be
entitled to give a Fleetwood Buy/Sell Notice if
Fleetwood has already received an Cayuga Buy/Sell
Notice.
(4) If a Buy/Sell Notice is not received
within the applicable 15-day period specified above
following a particular Buy/Sell Trigger, then no
Buy/Sell Right shall be exercisable in respect of
such Buy/Sell Trigger.
(iii) Buy/Sell Process.
(1) Not later than the 15th day after
the Buy/Sell Notice Date (the "Response Date"), the
Noticed Member shall irrevocably notify the Offering
Member in writing whether the Noticed Member (A) has
elected to buy the Interest, Member Units and Member
Loans Beneficially Owned by each member of the
Offering Group pursuant to the Buy/Sell Notice, or
(B) has elected, on behalf of each member of the
Noticed Group, to sell the Interests, Members Units
and Member Loans Beneficially Owned by each member of
the Noticed Group pursuant to the Buy/Sell Notice;
provided, however, that the Icahn Group may not elect
to buy Interests, Member Units or Member Loans
unless, in the case it is the Noticed Member, the
notice given by it pursuant to this Section (1) is
accompanied by evidence, reasonably satisfactory to
the Cayuga Group, that (i) Fleetwood has, and will
continue to maintain, the Required Net Worth or (ii)
Fleetwood's obligations under Section 7.05(b) are
guaranteed by an entity which has, and will continue
to maintain, the Required Net Worth.
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(2) If the Noticed Member fails to give
that notice by the Response Date, the Noticed Member
will be deemed to have elected, on behalf of each
member of the Noticed Group, to sell the Interests,
Member Units and Member Loans Beneficially Owned by
each member of the Noticed Group.
(3) If the Noticed Member gives (or is
deemed to have given) notice to the Offering Member
that the Noticed Group has elected to sell the
Interests, Member Units and Member Loans pursuant to
(1) or (2) above, then the Offering Member shall be
obligated to purchase from each member of the Noticed
Group (and each member of the Noticed Group shall be
obligated to sell to the Offering Member) (a) all
Interests Beneficially Owned by each member of the
Noticed Group at a price for each percentage point of
Interests equal to the Buy/Sell Price and all Member
Units with respect to which the Company is the
nominee for each such member of the Noticed Group at
a price per Member Unit equal to the Imputed Unit
Price and (b) all Member Loans held by each Member of
the Noticed Group at a price equal to the principal
amount of such Member Loans together with accrued
interest on such Member Loans through the Buy/Sell
Closing.
(4) If the Noticed Member gives notice
to the Offering Member that the Noticed Group has
elected to buy Interests, Member Units and Member
Loans pursuant to (1) above, then each member of the
Offering Group shall be obligated to sell to the
Noticed Member (and the Noticed Member shall be
obligated to purchase from each member of the
Offering Group), (a) all Interests Beneficially Owned
by each such member of the Offering Group at a price
for each percentage point of Interests equal to the
Buy/Sell Price and all Member Units with respect to
which the Company is the nominee for each such member
of the Noticed Group at a price per Member Unit equal
to the Imputed Unit Price and (b) all Member Loans
held by each Member of the Offering Group at a price
equal to the principal amount of such Loans together
with accrued interest on such Member Loans through
the Buy/Sell Closing.
(iv) Buy/Sell Closings. The closing (a "Buy/Sell
Closing") of any sale or sales of Interests and Member Units
required by the exercise of a Member's Buy/Sell Right shall
take place at the principal offices of the Company at 10:00
a.m., local time, on the first Business Day which is 45 days
after the Buy/Sell Notice Date (or such earlier Business Day
as the buyer of Interests, Member Units and Member Loans
specifies on not less than two Business Days prior written
notice to the seller(s) or such later Business Day as the
buyer and the seller(s) shall mutually agree to). At the
Buy/Sell Closing, the seller(s) will execute and deliver such
documents as may be required by the buyer to evidence the sale
and transfer of the seller's(s') entire Interests in the
Company, Member Units and Member Loans, to be sold free and
clear of all liens and encumbrances whatsoever (other than the
Institutional Debt), the buyer will pay the Buy/Sell
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27
Purchase Price in immediately available funds and the buyer
will provide for the release to the seller of collateral
(other than Member Units) with respect to which the seller has
granted a security interest to PWRES pursuant to Section
9.03(c). In addition, each Person selling or purchasing
Interests and/or Member Units and/or Member Loans at the
Buy/Sell Closing shall execute and deliver an instrument
acknowledging, representing and warranting to the other
parties that such Person (a) made its purchase or sale
decision on a fully informed basis, (b) had full access to the
books and records of the Company and the Partnership prior to
making its decision, (c) had ample opportunity to ask
questions of the management of the Company and the Partnership
prior to making its decision and received satisfactory answers
to those questions, and (d) did not rely on any representation
of any other Person in making its decision.
(v) GP Transfer Provisions.
(1) Once a Buy/Sell Notice has been
received by either Cayuga or Fleetwood, Cayuga and
NPI will not, and will not cause or permit any Member
of the Cayuga Group to, take any action, or fail to
take any reasonable action, intended to alter
adversely the rights, authority or obligations of the
General Partner in any way. After a Buy/Sell Closing
in which the members of the Cayuga Group are sellers,
upon written request from Fleetwood, NPI shall cause
the GP Interest to continue to be held by the General
Partner so that, if Fleetwood so elects, NPI may
transfer or cause to be transferred to Fleetwood or
its designee the GP Stock at the GP Transfer Closing.
(2) If Cayuga notifies (or is deemed to
have notified) Fleetwood that the Cayuga Group has
elected to sell Interests, Member Units and Member
Loans pursuant to Section 7.05(b)(iii)(1) or (2) or
if any member of the Cayuga Group is a seller at the
Buy/Sell Closing, then from and after the date of
such notice (or deemed notice) or Buy/Sell Closing
Fleetwood may exercise the GP Transfer Option by
delivering a GP Exercise Notice to Cayuga and NPI.
(3) The closing of the GP Transfer (the
"GP Transfer Closing") shall take place at the
principal offices of NPI at 10:00 a.m., local time,
on the first Business Day which is 45 days after the
receipt by Cayuga and NPI of the GP Exercise Notice,
in the event that the Debt Requirement (as defined
below) is not applicable, otherwise the GP Transfer
Closing will take place as soon as practicable after
the Debt Requirement is satisfied, waived by
Fleetwood or otherwise eliminated; provided, however,
that if Fleetwood delivers the GP Exercise Notice to
Cayuga and NPI at least 20 days prior to the Buy/Sell
Closing pursuant to Section 7.05(b)(iv) and if the
Debt Requirement is not applicable, then the GP
Transfer Closing shall take place simultaneously with
the Buy/Sell Closing. At the GP Transfer Closing,
NPI or its Affiliate will execute and deliver such
documents as may be required by Fleetwood to evidence
the sale and
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transfer of NPI's or its Affiliate's entire interest
in the GP Stock to Fleetwood or its designee, to be
sold free and clear of all liens and encumbrances
whatsoever (other than the Institutional Debt), and
Fleetwood will pay the GP Purchase Price to NPI or
its designee in immediately available funds. In
addition, each Person who is a party to the GP
Transfer transaction shall execute and deliver an
instrument acknowledging, representing and warranting
to the other parties that such Person (a) made its
purchase or sale decision on a fully informed basis,
(b) had full access to the books and records of the
Company and the Partnership prior to making its
decision, (c) had ample opportunity to ask questions
of the management of the Partnership prior to making
its decision and received satisfactory answers to
those questions, and (d) did not rely on any
representation of any other Person in making its
decision. Also at the GP Transfer Closing, NPI and
Fleetwood shall enter into an agreement by which:
(i) Fleetwood agrees to indemnify Cayuga and NPI and
their respective controlling persons, partners,
Affiliates, officers, directors and employees from
and against any and all loss, liability or damage any
of them may incur by reason of (x) findings that in
light of the conduct of the General Partner following
the GP Transfer Closing, the GP Transfer breached the
fiduciary duties of NPI or any of its Affiliates or
otherwise was unlawful or (y) the activities of the
General Partner or the Partnership after the GP
Transfer Closing; and (ii) subject to Section
10.07(b), NPI agrees to indemnify Fleetwood and its
controlling persons, Affiliates, officers, directors
and employees from and against any and all loss,
liability or damage any of them may incur by reason
of the activities of the General Partner or the
Partnership before the GP Transfer Closing other than
those maters for which NPI and its Affiliates are
indemnified pursuant to Section 8.06.
(4) If the GP Transfer would result in
an acceleration of a material amount of a
Partnership's mortgage or other debt obligations
and/or the incurrence of prepayment premiums (a "Debt
Requirement"), then:
(A) NPI will, and will cause its
Affiliates to, use commercially
reasonable efforts to facilitate the
elimination or waiver of the Debt
Requirement and, without limiting
the generality of the foregoing,
will (subject to its fiduciary
obligations) vote all of the GP
Units in a manner reasonably
required to facilitate the GP
Transfer.
(B) Until the GP Transfer Closing
and except as otherwise provided
above, the General Partner and its
Affiliates will continue to perform
the same functions and receive the
same compensation for and from a
Partnership as before the Closing
and will take no action to diminish
the rights and privileges of the
General Partner.
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(C) Until the GP Transfer Closing
occurs, no member of the Icahn Group
may, singly or as part of a Group,
directly or indirectly, through one
or more intermediaries or otherwise:
(i) make, or in any way
participate in, directly or
indirectly, any "solicitation"
of "proxies" (as such terms are
defined or used in Regulation
14A under the Exchange Act) or
become a "participant" in any
"election contest" (as such
terms are defined or used in
Rule 14a-11 of the Exchange
Act) with respect to a
Partnership;
(ii) initiate, propose or
otherwise solicit, directly or
indirectly, Limited Partners
for the approval of one or
more proposals with respect
to a Partnership; or
(iii) instigate or encourage,
directly or indirectly, any
Limited Partner or other
Third Party to do any of the
foregoing;
if in any such case the purpose or
effect of such conduct is or is
likely to be (1) to remove the
General Partner without payment of
the GP Purchase Price, (2) to in any
way adversely alter the rights,
authority or obligations of a
general partner of a Partnership,
(3) to reduce the rights, authority
or obligations of a general partner
of a Partnership, or (4) to reduce
any compensation payable to, or
increase the obligations of, any
general partner of the Partnership
or any Affiliate of the General
Partner.
(5) From and after the date of the GP
Transfer Closing and so long as any member of the
Icahn Group controls the General Partner, the General
Partner shall not elect to defer any amount payable
to the General Partner pursuant to Sections 9.4.2,
9.5.1, 11.2.3 or 11.3 of a Partnership Agreement,
unless in the opinion of counsel to the General
Partner the fiduciary duties of the General Partner
require otherwise. Fleetwood agrees, subject to the
terms of the immediately following paragraph, that
without the written consent of NPI, Fleetwood will
not, and it will not cause or permit any member of
the Icahn Group to, amend Sections 9.4.2, 9.5.1,
11.2.3 or 11.3 of a Partnership Agreement in a manner
adverse to the General Partner. Fleetwood also
expressly acknowledges and agrees, subject to the
terms of the immediately following paragraph, that in
the event Sections 9.4.2, 9.5.1, 11.2.3 or 11.3 of a
Partnership Agreement is amended at any time after
the GP Transfer Closing in a manner adverse to the
General Partner, Fleetwood will nonetheless pay or
cause to be paid
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to the General Partner an amount equal to 100% of any
amount that would have been payable to the General
Partner pursuant to Section 9.4.2, 9.5.1, 11.2.3 or
11.3 of a Partnership Agreement but for such
amendment or amendments, such payments to be paid in
immediately available funds within three Business
Days following the mailing to the Limited Partners of
any distributions pursuant to the Partnership
Agreement.
(6) If after the GP Transfer Closing the
General Partner is removed by a vote (whether such
vote is taken at a meeting or by written consent) of
the Limited Partners in accordance with the terms of
the Partnership Agreement, and provided that the
General Partner actively opposes its removal in
connection with any such vote, then from and after
the effective date of such removal, the provisions of
the immediately preceding paragraph shall cease to
apply (unless and until any member of the Icahn Group
shall again become, or otherwise gain control of, the
general partner of a Partnership, in which case the
provisions of the immediately preceding paragraph
shall automatically be revived and apply to periods
following the date of such occurrence), unless NPI
can prove that the Limited Partners had Cause (as
such term is defined in Section 6.04, except that for
purposes of this paragraph the definition shall also
be deemed to include the taking of (or failure to
take) any action which constitutes a breach of the
General Partner's fiduciary duties to the Partnership
or the Limited Partners) to remove the General
Partner. For purposes of determining the foregoing,
unless the parties can mutually agree the parties
shall submit the issue to binding arbitration for
determination, which determination shall be final and
binding on all parties for all purposes of this
Agreement, with the losing party to pay all
reasonable costs incurred by all relevant parties in
connection with such arbitration proceeding.
(7) During the term of this Agreement,
except for a transfer to Fleetwood or its designee as
contemplated herein, and except as may be required by
the terms of the Institutional Debt, NPI will not,
and will not cause or permit any of its Affiliates
to, directly or indirectly, sell, convey, transfer,
assign, pledge or hypothecate the GP Stock or the GP
Interest to any Person, other than transfers of the
GP Stock to an Affiliate who agrees in writing for
the benefit of Fleetwood to remain an Affiliate of
NPI; provided, however, that (i) no direct or
indirect transfer of the GP Stock or the GP Interest
by NPI or any of its Affiliates shall be deemed to
occur by reason of any direct or indirect transfer of
the capital stock or other security of NPI, including
without limitation any transfer of the capital stock
or other security of NPI pursuant to a merger,
consolidation or other extraordinary corporate
transaction to which NPI or any of its subsidiaries
is a party, and (ii) it is expressly understood and
agreed by the Members that the foregoing shall not
prohibit the GP Stock or the GP Interest from being
pledged by NPI or its Affiliates to collateralize or
otherwise support general corporate obligations of
NPI or its Affiliates
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existing on the Effective Date or incurred during the
term of this Agreement, in either case in the
ordinary course of business.
(c) Transfers by Operation of Law. In the event that a
Member (i) declares its intention to file a voluntary petition under bankruptcy
or insolvency law or files a voluntary petition under any bankruptcy or
insolvency law or a petition for the appointment of a receiver or makes an
assignment for the benefit of creditors, or (ii) is subjected involuntarily to
such a petition or assignment or to an attachment or other legal or equitable
interest with respect to the Member's Interests, and such involuntary petition
or assignment or attachment is not discharged within 30 days after the date
thereof, or (iii) is subject to a transfer of its Interests by operation of
law, then if such Member is a Fleetwood Member, Cayuga may elect to require the
Company to Effect a Redemption with respect to the Icahn Group, and if such
Member is an Cayuga Member, then Fleetwood may elect to require the Company to
Effect a Redemption with respect to the Cayuga Group.
(d) Transfers in Violation of this Agreement. If any
transfer of Interests or Member Units is made or attempted by any member of the
Fleetwood Group contrary to the provisions of this Section 7.05, then Cayuga
may elect to require the Company to Effect a Redemption with respect to the
Icahn Group at any time before or after the transfer; and if any transfer of
Interests or Member Units is made or attempted by any member of the Cayuga
Group contrary to the provisions of this Section 7.05, then Fleetwood may elect
to require the Company to Effect a Redemption with respect to the Cayuga Group
at any time before or after the transfer. In addition to any other legal or
equitable remedies which it may have, the Company may enforce its rights by
specific performance or injunctive relief, without proof of irreparable harm
and without any need to post a bond.
Section 7.06 Capital Calls; Minimum Working Capital
Reserve; Redemption of Interests of Defaulting Member.
(a) The Company may from time to time require Members to
make additional contributions to the capital of the Company in amounts and at
times the Company reasonably deems necessary, for the purposes of (i) funding
the cost of purchasing Units accepted for purchase by the Company pursuant to
the Offer, a Follow-up Offer, any Responsive Offer or any Negotiated Purchase
(an "Offer Call"), and (ii) funding any other costs, expenses or liabilities
(including litigation and settlement costs and indemnity obligations under this
Agreement) of the Company (an "Operating Call") (x) which have been incurred
and were permitted to be incurred under this Agreement, including but not
limited to payments of principal and interest and other amounts required to be
made pursuant to the terms of the Institutional Debt, or (y) which will be
incurred within the six months following the date of the Capital Call Notice
relating thereto and are permitted to be incurred under this Agreement, in the
case of both (x) and (y) in connection with any redemption of Interests by the
Company or any of the administrative activities contemplated by Section 10.02.
Except as provided in the preceding sentence, the Company may not make a
capital call for any other purpose without the consent of all Members. The
amounts of such required additional contributions shall be specified in written
notices (each a "Capital Call Notice") given to the Members. Each Capital Call
Notice shall specify (i) the aggregate amount of capital required to be
contributed by all Members; and (ii) each Member's pro rata share of that
amount, which shall be the aggregate
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amount of additional capital so required multiplied by the percentage which
represents the total amount of Interests owned of record by a Member; and (iii)
a date (not less than two Business Days after the date of a Capital Call Notice
relating to an Offer Call, or five Business Days in the case of a Capital Call
Notice which relates solely to an Operating Call) by which each Member is to
pay the required amount to the Company in immediately available funds. A
Capital Call Notice in respect of the Offer Call shall not be sent more than
five Business Days before the date the funds are anticipated to be disbursed by
the Company. The Members hereby agree, upon receipt of an Offer Call, to make
additional contributions to the capital of the Company up to a maximum of an
additional $9,000,000 to fund costs incurred in connection with the Offer.
(b) The Members agree that the Company shall at all times
maintain a working capital reserve (the "Reserve") of not less than $50,000 in
cash. If at any time the amount of the Reserve shall fall below $50,000, then
the Company shall (i) make an Operating Call in an amount necessary to restore
the Reserve to $75,000 and (ii) send a Capital Call Notice to each Member in
respect of such Operating Call. The Members shall be required to fund the
Operating Call as set forth in Section 7.06(a).
(c) Subject to the provisions of Sections 4.02(c),
4.02(d), 4.03(a)(i), 4.03(a)(ii) and 4.06(b) (under which the Icahn Group is
entitled to receive 100% of the Redemption Amount in the event Fleetwood elects
to have the Company Effect a Redemption), (i) if a Fleetwood Member fails to
make a capital contribution pursuant to a Capital Call Notice as and when
required, then Cayuga may elect to require the Company to Effect a Redemption
with respect to the Icahn Group, and (ii) if a Cayuga Member fails to make a
capital contribution pursuant to a Capital Call Notice as and when required,
then Fleetwood may elect to require the Company to Effect a Redemption with
respect to the Cayuga Group.
Section 7.07 Qualification of Voters. The Manager may fix
a time, not more than 60 nor less then five days prior to the date of any
meeting of Members, or prior to the last day on which the consent or dissent of
Members may be effectively expressed with respect to any action proposed to be
taken without a meeting, as the time as of which Members entitled to notice of,
and to vote at such a meeting, or whose consent or dissent is required or may
be expressed with respect to any such action, as the case may be, shall be
determined, and all persons who were holders of record of Interests at such
time, and no others, shall be entitled to notice of, and to vote at such
meeting, or to express their consent or dissent, as the case may be.
Section 7.08 Determination of Members of Record for Other
Purposes. The Manager may fix a time, not less than ten days or more than
sixty days preceding the date fixed for the payment of any dividend or for the
making of any distribution or for the delivery of evidences of rights or
evidences of interests arising out of any change, conversion, or exchange of
Interests, as a record date for the determination of the Members entitled to
receive any such dividend, distribution, rights or interests, and in such case
only Members on record at the time so fixed shall be entitled to receive such
dividend, distribution, rights or interest.
Section 7.09 Membership Interest Ledger. The Company
shall maintain a membership interest ledger which contains the name and address
of each Member of the
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Company and the amount of Interests which the Member holds. The membership
interest ledger may be in written form or in any other form capable of
producing copies for visual inspection. The original or duplicate of the
membership interest ledger shall be kept at the offices of the Manager, within
or without the State of New York, or, if none, at the principal executive
office of the Company.
Section 7.10 [Intentionally Omitted]
Section 7.11 Distributions; Surplus. To the extent
permitted by law and by the terms of the Institutional Debt, the Manager shall
declare and make distributions out of the income, if any, of the Company at
such time and in such amounts as, in its reasonable discretion, the Manager
shall deem to be available after establishment or replenishment of reasonable
working capital reserves; provided, however, that after (i) the Offer has
expired, (ii) all litigation relating to the Offer has been resolved and (iii)
all other costs and expenses of the Offer have been paid or duly provided for,
the Manager shall declare and make distributions promptly after the receipt by
the Company of any cash distributions made by the Partnership in respect of
Company Units in the aggregate amount of such distributions received by the
Company.
ARTICLE VIII.
INDEMNIFICATION
Section 8.01 Indemnification of Managers, Officers and
Members.
(a) Each person who was or is made a party or is
threatened to be made a party to or is otherwise involved in any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "Proceeding"), by reason of the fact that he
is or was a Manager or officer of the Company (an "Indemnitee") shall be
indemnified and held harmless by the Company to the fullest extent authorized
by the laws of the State of New York, as the same exist or may hereafter be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Company to provide broader indemnification rights than
such law permitted the Company to provide prior to such amendment), against all
expense, liability and loss (including attorneys' fees, judgments, fines,
excise taxes or penalties and amounts paid in settlement) reasonably incurred
or suffered by such Indemnitee in connection therewith; provided, however, that
no Indemnitee shall be entitled to indemnity under this paragraph for any
expense, liability or loss resulting from conduct that is determined, by final
judicial decision from which there is no further right to appeal, to constitute
gross negligence or willful misconduct on the part of such Indemnitee.
Notwithstanding the foregoing, indemnification under this Section 8.01(a) shall
not be available to any Indemnitee in respect of any claim for which the
Indemnitee or any of its Affiliates is required to furnish indemnification to
the Company under any other provision of this Article VIII.
(b) The right to indemnification conferred in Section
8.01 shall include the right to be paid by the Company the expenses (including
attorneys' fees) incurred in defending any such Proceeding in advance of its
final disposition (an "Advancement of Expenses"); provided, however, that an
Advancement of Expenses incurred by an Indemnitee shall be made
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only upon delivery to the Company of an undertaking, by or on behalf of such
Indemnitee, to repay all amounts so advanced (i) if it shall ultimately be
determined by final judicial decision from which there is no further right to
appeal that such Indemnitee is not entitled to be indemnified for such expenses
under the provisions of the laws of the State of New York or (ii) by reason of
a final judicial determination contained in a nonappealable order, that such
beneficiary is not entitled to be indemnified under this Section 8.01, whether
by reason of the last sentence of Section 8.01(a) or otherwise.
(c) It is expressly understood and agreed by the Members
that notwithstanding anything contained in this Agreement to the contrary, to
the extent necessary to satisfy its indemnification obligations under this
Section 8.01, the Company may, upon ten days prior written notice to Fleetwood,
sell or otherwise liquidate Company Units; provided, unless such sale or other
liquidation of the Company Units is made at a price equal to or greater than
the Net Asset Value, the Company may not sell or otherwise liquidate Company
Units unless it has first made an Operating Call to fund such indemnification
obligations.
Section 8.02 Indemnification by Cayuga. Cayuga shall
indemnify and hold harmless the Company and its Members against any loss,
claim, damage or liability (or any action in respect thereof), joint or
several, to which the Company or any Member may become subject, insofar as such
loss, claim, damage or liability (or action in respect thereof) arises out of
or is based upon (i) any untrue statement of a material fact contained in any
of the Offer Documents, or the omission to state in the Offer Documents a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only to the extent that any such loss, claim,
damage, liability or action is finally judicially determined in a nonappealable
order to have arisen out of or to be based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and in
conformity with information furnished by members of the Cayuga Group or their
respective officers, employees or representatives for inclusion in the Offer
Documents; or (ii) any breach or alleged breach by the General Partner of the
Partnership, at any time it was controlled by Affiliates of members of the
Cayuga Group, of its fiduciary duties to the Partnership or its partners;
provided, however, that if such breach or alleged breach relates to the Offer,
Cayuga shall have an indemnification obligation hereunder only to the extent of
a final nonappealable determination by a court of competent jurisdiction to the
effect that the General Partner, at the time it was controlled by an Affiliate
of members of the Cayuga Group, did in fact breach a fiduciary duty to the
Partnership or its partners or (iii) any capital account deficit restoration
obligation of any direct or indirect general partner of a Partnership.
Section 8.03 Indemnification by Fleetwood. Subject to
Section 4.04, Fleetwood shall indemnify and hold harmless the Company and its
Members against any loss, claim, damage or liability (or any action in respect
thereof), joint or several, to which the Company or any Member may become
subject, insofar as such loss, claim, damage or liability (or action in respect
thereof) arises out of or is based upon any untrue statement of a material fact
contained in any of the Offer Documents, or the omission to state in the Offer
Documents a material fact required to be stated therein or necessary to make
the statements therein not misleading, but only to the extent that any such
loss, claim, damage, liability or action is finally judicially determined in a
nonappealable order to have arisen out of or to be based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance
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upon and in conformity with information furnished by Fleetwood, its Affiliates
or their respective officers, employees or representatives for inclusion in the
Offer Documents.
Section 8.04 Non-Exclusivity of Rights. The rights to
indemnification and to the Advancement of Expenses conferred in this Article
VIII shall not be exclusive of any other right which any Person may have or
hereafter acquire under this Agreement or otherwise.
Section 8.05 Indemnification of Employees and Agents of
the Company. The Company may, to the extent authorized from time to time by
the Manager, grant rights to indemnification and to the Advancement of Expenses
to any employee or agent of the Company to the fullest extent of the provisions
of this Article VIII with respect to the indemnification and Advancement of
Expenses of Managers and officers of the Company; provided, however, the
Company may not hire any employees (other than the Manager) without the consent
of all Members.
Section 8.06 Indemnification of NPI. In consideration of
the pledge (the "Pledge") of the shares of the GP Stock and/or the general
partnership interest in the General Partner held by NPI Realty Management Corp.
to secure a loan from PWRES (or another institutional lender) to the Company
and for other consideration, the Company agrees to indemnify and hold harmless
NPI, its Affiliates and their respective controlling Persons, directors,
officers, employees, servants, attorneys and agents (each, an "NPI Indemnitee")
from and against damages, losses, penalties, fines, settlement payments,
obligations (contractual or otherwise), liabilities, claims, actions and causes
of action (actual or threatened, matured or unmatured, known or unknown,
contingent or otherwise) and costs and expenses suffered, sustained, incurred
or required to be paid by any NPI Indemnitee (other than a loss of, or
diminution in value attributable to, the investment of RJN Corporation in
Cayuga and Cayuga Capital Corporation), including without limitation any costs
of investigation and attorneys' or experts' fees and disbursements, based upon
or arising from or relating to any and all claims, demands, actions, suits or
proceedings, civil, criminal, administrative or investigative, made, commenced
or initiated by the Named Persons (as defined below) (other than by any of the
Named Persons solely in his capacity as a limited partner of Cayuga) which are
based upon, arise out of or related to (i) the designation of NPI Realty
Management Corp. as the managing general partner of the General Partner and any
other amendment to the partnership agreement of the General Partner effected by
the Second Amended and Restated General Partnership Agreement of the General
Partner, dated as of November 15, 1995, and the Third Amended and Restated
General Partnership Agreement of the General Partner, dated as of February 13,
1996; (ii) the transactions contemplated by this Agreement, as it may be
amended from time to time (including any termination of the license agreements
between the Partnership and Hampton Inns, Inc. and any acceleration of
mortgages encumbering Partnership properties resulting from the Offers) and the
Pledge; and (iii) any action of the NPI Indemnitees, the General Partner, Fox
Realty Investors or NPI Equity Investments II, Inc. taken or omitted in good
faith in order to facilitate the transactions contemplated by this Agreement.
For purposes of this Section, the term "Named Persons" are any of Portfolio
Realty Associates, L.P., Xxxxx X. Xxxxxx, Xx., Xxxxxx X. Xxxxx, Xxxxx X.
Xxxxxx, Trustee, Xxxxxxx X. Xxxxxx Family Revocable Trust Dated April 17, 1974;
As Amended, W. Xxxxxxx XxXxxxxx and Xxxxx X. Xxxxx, whether acting individually
or in a derivative capacity on behalf of the General Partner, GHI Associates or
Fox Realty Investors, and the respective heirs, beneficiaries, successor and
assigns of each of the
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foregoing. Subject to the next two succeeding sentences, the rights of NPI and
any NPI Indemnitee to indemnification under this Section 8.06 for any
settlement with any Named Person shall be subject to (i) such settlement having
been made by NPI or the NPI Indemnitee acting reasonably and in good faith and
(ii) the prior written consent of Fleetwood. If Fleetwood shall object or fail
to consent to the terms of any such settlement within five Business Days after
written notice specifying the terms thereof (which notice must also be given to
Cayuga), Cayuga shall pay to Fleetwood its pro rata share of any such
settlement, and Fleetwood shall assume all of the indemnification obligations
of the Company to NPI and any NPI Indemnitee hereunder. In such event,
Fleetwood shall assume the control of any litigation initiated by any Named
Person, shall provide NPI with such assurances as shall be reasonably requested
by NPI as to Fleetwood's having, and continuing to maintain, the Required Net
Worth, which shall be deemed necessary to permit it to assume such control and
satisfy any resultant judgment. NPI shall be required in connection with any
such assumption of control to cooperate with Fleetwood in the defense of such
litigation. NPI and any NPI Indemnitee shall give prompt written notice to
Cayuga and Fleetwood of any claim based on the indemnity agreement contained in
this Section 8.06. No failure to give such notice shall affect the
indemnification obligations of any indemnifying party hereunder, except to the
extent such failure materially prejudiced such indemnifying party's ability to
successfully defend the matter giving rise to the indemnification claim. NPI
and any NPI Indemnitee shall have the right to settle any claim initiated by
any Named Person without obtaining any consent hereunder in the event that
indemnification is not sought pursuant to this Section 8.06.
ARTICLE IX.
FINANCE
Section 9.01 Checks, Drafts, etc. All checks, drafts and
orders for the payment of money, notes and other evidences of indebtedness,
issued in the name of the Company shall be signed by the Manager or such other
person or persons as the Manager may from time to time designate.
Section 9.02 Fiscal Year. The fiscal year of the Company
shall be the calendar year.
Section 9.03 Incurrence of Debt.
(a) If a Fleetwood Member fails to make a capital
contribution pursuant to a Capital Call Notice given pursuant to Section 7.06
as and when required and Cayuga does not elect to require the Company to Effect
a Redemption with respect the Icahn Group as a result of such failure, then one
or more Cayuga Members may, at any time prior to the date the Fleetwood Member
makes the required capital contribution, elect to fund the entire amount of the
capital contribution required to be made by the Fleetwood Members by a loan to
the Company, in which case (i) any capital contribution made by any Fleetwood
Member pursuant to such Capital Call Notice shall be returned to such Fleetwood
Member and (ii) the capital contribution so made by the Cayuga Members shall be
reclassified and treated for all purposes as loans to the Company. If a Cayuga
Member fails to make a capital contribution pursuant to a Capital Call Notice
given pursuant to Section 7.06 as and when required and Fleetwood does
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not elect to require the Company to Effect a Redemption with respect to the
Cayuga Group as a result of such failure, then one or more Fleetwood Members
may, at any time prior to the date the Cayuga Members make the required capital
contribution, elect to fund the entire amount of the capital contribution
required to be made by the Cayuga Members by a loan to the Company, in which
case (x) any capital contribution made by any Cayuga Member pursuant to such
Capital Notice shall be returned to such Cayuga Member and (ii) the capital
contribution so made by the Fleetwood Members shall be reclassified and treated
for all purposes as loans to the Company. Any such loans referred to in the
preceding sentences ("Member Loans") shall bear interest at the rate of 18% per
annum, compounded daily, and the Company may pledge Company Units to secure
such loans. Such Member Loans shall, by their terms, be payable only out of
funds which otherwise would be available for distributions to Members and shall
be paid in full prior to any further distributions to Members being made by the
Company.
(b) The Manager shall be authorized on behalf of the Company
to enter into a loan agreement with PWRES on substantially the terms and
conditions set forth in a commitment letter, dated February 13, 1996, from
PWRES. The Manager shall be further authorized from time to time to enter into
such amendments of such loan agreement as it may in its sole discretion
determine to be in the best interests of the Company, provided, however, that,
without the consent of all of the Members, the Manager shall not be authorized
to make a material modification to the loan agreement that is inconsistent with
the commitment letter, including increasing the amount to be borrowed
thereunder, increasing the interest rate or fees to be paid thereunder, taking
any action which would permit the holder of the Institutional Debt to look
solely to the collateral security posted by the Icahn Group and not to the
collateral security posted by or on behalf of the Cayuga Group or otherwise
imposing personal liability on any Member or its Affiliates for the repayment
of such indebtedness. The Manager shall give a Capital Call Notice to the
Members if required to generate amounts necessary to pay when due any principal
or interest or fees required to be paid pursuant to the terms of the
Institutional Debt.
(c) Cayuga shall cause to be granted to PWRES a security
interest in each of the Member Units identified in Section 1.02(a) as
Beneficially Owned by partners in the Cayuga Group. Fleetwood shall cause to
be granted to PWRES a security interest in (i) the Member Units identified in
Section 1.03(b) as Beneficially Owned by the Icahn Group and (ii) not less than
$1,948,275 of negotiable instruments satisfactory to PWRES. In consideration of
the grant of such security interests, Fleetwood and Cayuga will be entitled to
receive from the Company during the period of time that their respective
collateral is being held as security by PWRES and provided they remain a Member
of the Company, quarterly payments in arrears of $25,000 in the case of
Fleetwood and quarterly payments in arrears of $50,000 in the case of Cayuga.
(d) After the Institutional Debt has been paid in full (other
than any residual fees payable thereunder), and prior to any further general
distributions to Members being made by the Company, there shall be paid to
Fleetwood and Cayuga, respectively, the amount of any payments made pursuant to
the Institutional Debt from the proceeds of any collateral security thereunder
provided by Fleetwood or partners in Cayuga, as the case may be.
(e) Except as otherwise provided in this Section 9.03, the
Company may not incur indebtedness for borrowed money.
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Section 9.04 Subordination.
(a) The Company, for itself and its successors and
assigns, covenants and agrees and each Member likewise covenants and agrees
that the payment of all obligations of the Company to the Members (the
"Subordinated Obligations") are hereby expressly subordinated, to the extent
and in the manner hereinafter set forth, to the prior payment in full in cash
of Senior Indebtedness (as defined in Section 9.04(i) hereof). These
provisions shall constitute a continuing offer to all persons who, in reliance
upon such provisions, become holders of, or continue to hold, Senior
Indebtedness, and such provisions are made for the benefit of the holders of
Senior Indebtedness, and such holders are hereby made obligees hereunder to the
same extent as if their names were written herein as such, and they and/or each
of them may proceed to enforce such provisions.
(b) All Senior Indebtedness (including interest thereon or
fees or any other amounts owing in respect thereof), all principal thereof and
premium, if any, and interest thereon (including, without limitation, any
interest accruing subsequent to the filing of a petition in bankruptcy at the
rate provided for in the documentation with respect thereto, whether or not
such interest is an allowed claim under applicable law) or fees or any other
amounts owing in respect thereof, shall first be paid in full in cash before
any payment (other than payments permitted to be made by the Credit Agreements)
of any kind or character (whether in cash, property or securities) is made on
account of the principal of (including installments thereof), or interest on,
or any amount otherwise owing in respect of the Subordinated Obligations (the
date on which all such amounts in respect of Senior Indebtedness shall be paid
in full is hereinafter referred to as the "Satisfaction Date"). Each holder of
the Subordinated Obligations hereby agrees that it will not xxx for, or
otherwise take, accept or receive, any amounts owing in respect of the
Subordinated Obligations prior to the Satisfaction Date; provided, however,
that holders of Subordinated Obligations may file proofs of claim in connection
with any bankruptcy proceeding involving the Company.
(c) In the event that notwithstanding the provisions of
Section 9.04(b), the Company shall make any payment on account of the principal
of, or interest on, or amounts otherwise owing in respect of, the Subordinated
Obligations, at a time when payment is not permitted by Section 9.04(b), such
payment shall be held by the holder of the Subordinated Obligations, in trust
for the benefit of, and shall be paid forthwith over and delivered to, the
holders of Senior Indebtedness or their representative or representatives under
the agreements pursuant to which the Senior Indebtedness may have been issued,
as their respective interests may appear, for application pro rata to the
payment of all Senior Indebtedness remaining unpaid to the extent necessary to
pay all Senior Indebtedness in full in cash in accordance with the terms of
such Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
(d) Upon any distribution of assets of the Company upon any
dissolution, winding up, liquidation or reorganization of the Company (whether
in bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or otherwise):
(i) the holders of all Senior Indebtedness shall first be
entitled to receive payment in full in cash of such of the principal
of, premium, if any, and interest (including,
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without limitation, any interest accruing subsequent to the filing of
a petition in bankruptcy at the rate provided in the documentation
with respect thereto, whether or not such interest is an allowed claim
under applicable law) and all other amounts due on such Senior
Indebtedness before any holder of the Subordinated Obligations is
entitled to receive any payment of any kind or character (whether in
cash, property or securities) on account of the principal of or
interest on or any other amount owing in respect of the Subordination
Obligations;
(ii) any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities to
which any holder of the Subordinated Obligations would be entitled
except for these provisions, shall be paid by the liquidating trustee
or agent or other person making such payment or distribution, whether
a trustee or agent, directly to the holders of Senior Indebtedness or
their representative or representatives under the agreements pursuant
to which the Senior Indebtedness may have been issued, to the extent
necessary to make payment in full in cash of all Senior Indebtedness
remaining unpaid, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness; and
(iii) in the event that, notwithstanding the foregoing
provisions of this Section 9.04(d), any payment or distribution of
assets of the Company of any kind or character, whether in cash,
property or securities, shall be received by any holder of the
Subordinated Obligations on account of principal of, or interest or
other amounts due on, the Subordinated Obligations before all Senior
Indebtedness is paid in full in cash, such payment or distribution
shall be received and held in trust for and shall be paid over to the
holders of the Senior Indebtedness remaining unpaid or unprovided for
or their representative or representatives under the agreements
pursuant to which the Senior Indebtedness may have been issued, for
application to the payment of such Senior Indebtedness until all such
Senior Indebtedness shall have been paid in full in cash, after giving
effect to any concurrent payment or distribution to the holders of
such Senior Indebtedness.
Without in any way modifying these provisions or affecting the
subordination effected hereby if such notice is not given, the Company shall
give prompt written notice to the holder of the Subordinated Obligations of any
dissolution, winding up, liquidation or reorganization of the Company (whether
in bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or otherwise).
(e) Subject to the prior payment in full of all Senior
Indebtedness in cash, the holders of the Subordinated Obligations shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of assets of the Company applicable to the Senior
Indebtedness until all amounts owing on the Subordinated Obligations shall be
paid in full, and for the purpose of such subrogation no payments of
distributions to the holders of the Senior Indebtedness by or on behalf of the
Company or by or on behalf of the holder of the Subordinated Obligations by
virtue of these provisions which otherwise would have been made to the holder
of the Subordinated Obligations, shall be deemed to be payment by the Company
to or on account of the Senior Indebtedness, it being understood that these
provisions are and are intended solely for the purpose of defining the relative
rights of the holder of the
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Subordinated Obligations, on the one hand, and the holders of the Senior
Indebtedness, on the other hand.
(f) Nothing contained in these provisions or in the
Subordinated Obligations is intended to or shall impair, as between the Company
and the holder of the Subordinated Obligations, the obligation of the Company
(but not the Manager or the Members), which is absolute and unconditional, to
pay to the holder of the Subordinated Obligations the principal of and interest
on the Subordinated Obligations as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of the holder of the Subordinated Obligations and creditors of
the Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the holder of the Subordinated Obligations
from exercising all remedies otherwise permitted by applicable law, subject to
(x) the rights, if any, under these provisions of the holders of Senior
Indebtedness in respect of cash, property, or securities of the Company
received upon the exercise of any such remedy and (y) the requirement set forth
in Section 9.04(b) that no such exercise shall be permitted prior to the
Satisfaction Date. Upon any distribution of assets of the Company referred to
in these provisions, the holder of the Subordinated Obligations shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
trustee or agent or other person making any distribution to the holder of the
Subordinated Obligations, for the purpose of ascertaining the persons entitled
to participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount of amounts paid or distributed thereon and all other facts pertinent
thereto or to these provisions.
(g) No right of any present or future holders of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by an act or failure to act on the part of
the Company or by any act or failure to act in good faith by any such holder,
or by any noncompliance by the Company with the terms and provisions of the
Subordinated Obligations, regardless of any knowledge thereof which any such
holder may have or be otherwise charged with. The holders of the Senior
Indebtedness may, without in any way affecting the obligations of the holder of
the Subordinated Obligations with respect thereof, at any time or from time to
time and in their absolute discretion, change the manner, place or terms of
payment of, change or extend the time of payment of, or renew or alter, any
Senior Indebtedness, or amend, modify or supplement any agreement or instrument
governing or evidencing such Senior Indebtedness or any other document referred
to therein, or exercise or refrain from exercising any other of their rights
under the Senior Indebtedness including, without limitation, the waiver of a
default thereunder, the release of any collateral securing such Senior
Indebtedness and an increase in the amount of the Senior Indebtedness, all
without notice to or assent from the holder of the Subordinated Obligations.
(h) Each Member agrees that it shall not assign, transfer,
pledge or otherwise dispose of or encumber the Subordinated Obligations except
pursuant to the Credit Documents (as hereinafter defined).
(i) The term "Senior Indebtedness" shall mean all Obligations
(as defined below) of the Company under the Credit Agreements (as defined
below) and any other Credit Document
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(as defined in the Credit Agreements) and any renewal, extension, restatement,
refinancing or refunding thereof.
(j) As used herein, (i) the term "Credit Agreements" shall
mean any agreement between the Company and PWRES or any of its Affiliates for
the provision of financing, (ii) the term "Credit Parties" shall have the
meaning provided in the Credit Agreements and (iii) the term "Obligations"
shall mean any principal, interest (other than residual fees or interest),
premium, penalties, fees, indemnities and other liabilities and obligations
payable under the documentation governing any Senior Indebtedness (including,
without limitation, all interest accruing subsequent to the filing of a
petition in bankruptcy at the rate provided in the governing documentation,
whether or not such interest is an allowed claim under applicable law).
Section 9.05 Tax Status. The Members intend and agree
that the Company shall constitute a partnership for federal, state and local
tax purposes. The Members agree that they shall not take any action
(including, without limitation, reporting items of income, gain, loss and
deduction from the Company) that is inconsistent with the Company's status as a
partnership for federal, state and local tax purposes.
Section 9.06 Reports. The Company will deliver to each
Member annual reports containing financial statements prepared in accordance
with U.S. generally accepted accounting principles (such reports to be
delivered within 90 days of the close of the fiscal year to which they relate).
Section 9.07 Expenses. All reasonable fees and expenses
incurred by the Company associated with the Offer, as well as all reasonable
legal fees and expenses incurred through the Effective Date by Cayuga and
Fleetwood in connection with the negotiation and documentation of this
Agreement, will be paid directly or reimbursed by the Company.
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01 Books and Records. The Company shall keep
correct and complete books and records of its accounts and transactions and
minutes of the proceedings of its Members and the Manager. Members and their
representatives, and any other persons or entities as may be admitted as
Members, will have complete access to all such books and records and to all
other information relating to the Company at all reasonable times. So long as
NPI or any of its Affiliates Beneficially Owns any Interests, NPI will cause
the Partnership to furnish each Member with access to any and all information
reasonably requested by the Members, including without limitation for purposes
of exercising the Members' rights under this Agreement.
Section 10.02 Administration. So long as Cayuga or any of
its Affiliates is the Manager, Cayuga will provide all administrative services
for the Company, including bookkeeping and accounting, maintenance of bank
accounts, monitoring of performance of assets, reporting to the Members,
monitoring the preparation and filing of tax returns by a third party,
preparation and filing of other reports (including audited financial statements
of the
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Company prepared by independent accountants), and maintaining corporate books
and records. All third-party professionals retained for the purposes of
providing such services will be retained by and their reasonable fees and
expenses paid by the Company (subject to a $5,000 per year maximum for fees and
expenses relating to the preparation of audited financial statements). The
Company shall pay to Cayuga an annual administration fee for providing the
services described in the first sentence of this equal to 1.0% per annum of
total capital contributions not to exceed $60,000 per annum. Such
administration fee shall be paid quarterly in advance.
Section 10.03 Distributions. All distributions from the
Company (after payment of expenses and reasonable reserves, in each case to the
extent expressly permitted hereunder) will be made to the Members in proportion
to their Interests in the Company. Units may not be sold (other than as
expressly permitted by Section 7.01(c) or distributed by the Company without
the written consent of all Members. All items of Company income, gain, loss,
deduction and credit shall be allocated to the Members in proportion to their
Interests in the Company.
Section 10.04 Counterparts. This Agreement 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 agreement.
Section 10.05 Entire Agreement. This Agreement supersedes any
and all prior or contemporaneous communications or agreements between the
parties hereto concerning the subject matter hereof, whether written or oral.
Section 10.06 Governing Law. The validity, interpretation,
enforceability and performance of this Agreement shall be governed by and
construed in accordance with the law of the State of New York, without
reference to its conflicts of law rules. To the fullest extent permitted by
law, each of the parties hereto hereby waive any right to trial by jury in any
action with respect to the matters set forth herein. The provisions of this
Agreement cannot be waived or modified unless such waiver or modification is in
writing and signed by the parties hereto. If any provision of this Agreement
shall be held invalid or unenforceable in whole or in part, that invalidity or
unenforceability shall not affect the validity or enforceability of the balance
of this Agreement. Without limiting the generality of the foregoing, if a
provision is held by a court of competent jurisdiction to be invalid or
unenforceable by reason of the length of time during which it is to remain in
effect, such provision nonetheless shall be enforceable to the maximum extent
and for the maximum period of time determined by such court to be permissible.
Section 10.07 Parties Contractually Bound; Remedies;
Enforcement and Late Payments.
(a) [Intentionally omitted].
(b) For purposes of Section 7.05(b)(v), the aggregate
liability of NPI shall not exceed $10 million.
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(c) It is understood and agreed that monetary damages
would be an inadequate remedy for violation of this Agreement, and that in the
case of an actual or threatened breach by either party or any of its
representatives, the other party shall be entitled to relief by way of
injunction, specific performance or other equitable remedy, without proof of
irrevocable harm and without the need for posting of a bond.
(d) Except for the obligations contained in Section
7.05(b)(v)(3), Cayuga shall be jointly and severally liable for the obligations
of Cayuga and of its Affiliates (other than the Company) hereunder (and, in
this regard, any action or inaction required hereunder to be taken or not taken
(or which Cayuga is required to cause or prevent or not permit) by any such
Affiliate shall be deemed to be an obligation of both such Affiliate and Cayuga
hereunder), and the Company and/or the Members shall have the right to enforce
this Agreement with respect to all such matters directly against Cayuga,
without first being required to file suit or seek recourse of any kind against
any other Person. In addition, if Cayuga is required to buy Interests and
Member Units pursuant to Section 7.05(b) and if Cayuga fails to perform its
obligations thereunder, then Cayuga shall pay directly to Fleetwood 100% of the
Buy/Sell Purchase Price, plus interest thereon accrued from the date of such
nonperformance at a rate per annum equal to the prime rate established by
Citibank N.A. in effect on the date of such nonperformance, plus eight percent
(but in no event greater than the maximum rate permitted by law).
(e) Fleetwood shall be jointly and severally liable for
the obligations of Fleetwood and of its Affiliates (other than the Company)
hereunder (and, in this regard, any action or inaction required hereunder to be
taken or not taken (or which Fleetwood is required to cause or prevent or not
permit) by any such Affiliate shall be deemed to be an obligation of both such
Affiliate and Fleetwood hereunder), and the Company and/or the Members shall
have the right to enforce this Agreement with respect to all such matters
directly against Fleetwood, without first being required to file suit or seek
recourse of any kind against any other Person. In addition, if Fleetwood is
required to buy Interests and Member Units pursuant to Section 7.05(b) and if
Fleetwood or its Affiliate fails to perform its obligations thereunder, then
Fleetwood shall pay directly to Cayuga 100% of the Buy/Sell Purchase Price,
plus interest thereon accrued from the date of such nonperformance at a rate
per annum equal to the prime rate established by Citibank N.A. in effect on the
date of such nonperformance, plus eight percent (but in no event greater than
the maximum rate permitted by law).
Section 10.08 Survival. Except as otherwise expressly
provided in this Agreement, or as the context otherwise clearly requires, the
provisions of this Agreement shall survive any termination of this Agreement or
of the interest of a Member in the Company. Without limiting the generality of
the foregoing, the parties expressly acknowledge and agree that the provisions
of Sections 4.01 and 4.06, Section 7.05(b)(v), Section 8.06 and Sections 10.06,
10.07, 10.08 and 10.10 shall survive any termination of this Agreement or of
the interest of a Member in the Company.
Section 10.09 Notices. Any and all notices, offers,
acceptances or any other communications provided for in this Agreement shall be
in writing and, except as otherwise expressly provided in this Agreement, shall
be deemed given when delivered by hand. Notice may also be given by telegram
or by electronic facsimile transmission, but in such case will be
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deemed given only when the telegram or transmission has been received by the
addressee. A duplicate of all such notices, offers, acceptances or other
communications between or among Members shall be mailed to the Company at its
principal offices. Notices shall be directed to the Members at their
respective addresses set forth below (or such other address as the party to be
notified may have requested in writing):
If to Cayuga:
Cayuga Associates L.P.
Attn: Xxxxxxx X. Xxxxxx
000 Xxxxxxx Xxxxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
with copies to:
Xxxxxx X. Xxxxxxx, Esq.
Xxxx X. Xxxxxx, Esq.
Rosenman & Colin LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
and
Xxxxxx X. Xxxxxxxxxxx, Esq.
Battle Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
If to Fleetwood:
Fleetwood Corp.
Attn: Xxxxxx X. Xxxxxxxx
000 Xxxxx Xxxxxxx Xxxx
Xxxxx Xxxxx, Xxx Xxxx 00000
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
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with a copy to:
G. Xxxxx Xxxxxxx, Esq.
Xxxxx X. Xxxxxxx, Esq.
Xxxxxx & Xxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
If to NPI:
Insignia Financial Group, Inc.
Attn: General Counsel
One Insignia Financial Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
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with a copy to:
Xxxxxx X. Xxxxxx, Esq.
Proskauer Xxxx Xxxxx & Xxxxxxxxxx, LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
Section 10.10 Interpretation. The parties hereto
acknowledge that this Agreement is the product of arm's-length negotiations
between the parties, each of whom was represented by counsel, and agree that in
any dispute concerning the interpretation of any provision of this Agreement,
there will be no presumption that any provision is to be construed against or
in favor of any particular party.
Section 10.11 Access to Partnership Information and
Properties. From and after the Commencement of the Offer, Cayuga will, or will
cause its Affiliates to, provide to the Members and any of their Affiliates,
and their respective officers, employees, agents or appointees, reasonable
access at all times, during normal business hours, to all properties, books and
records, financial information, agreements, deeds of trust, mortgages and other
debt instruments and any and all other documents, information and data (whether
written or computer-based) pertaining to the operations and assets of the
Partnership in the possession or control of Cayuga or any of its Affiliates,
including, without limitation, the General Partner.
Section 10.12 Written Consents. Notwithstanding any
provision of this Agreement to the contrary, any action required under this
Agreement to be taken or prohibited from being taken by the Company or any
Member may not be taken or may be taken, as the case may be, without the need
to amend this Agreement if all Members deliver written consents to such action
or inaction to the Manager, which consents shall be filed in the minute book of
the Company.
Section 10.13 Notice of Filing of the Partnership's Report
on Form 10-K or 10-KSB. Cayuga covenants and agrees that Cayuga will, or will
cause an Affiliate to, provide notice to each Member (other than Cayuga and its
Affiliates), within two Business Days after the date on which the Partnership
files its Report on Form 10-K or 10-KSB (including any amendment thereto) with
the Commission, that the Partnership has filed such Report (or amendment).
Section 10.14 Redemptions. As used in this Agreement,
the requirement of or election by the Company to "Effect a Redemption" with
respect to a Member Group means that the Company shall be required or may
elect, as the case may be, to redeem all Interests held by each Member who is a
member of the Member Group being redeemed and purchase from each member of such
Member Group all Member Units of such member (and each such member shall be
required to sell such Member Units to the Company), for an aggregate
consideration equal to the Redemption Amount; provided, however, that in the
case of a Redemption pursuant to Section 5.08 or Section 7.05(c),
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7.05(d) or 7.06(c), the aggregate consideration to be paid by the Company will
equal 75% of the Redemption Amount. In the event the Company Effects a
Redemption with respect to a Member Group in accordance with the provisions of
this Agreement, then (i) as of the date of such election or the date of the
event that gives rise to such requirement, the interest in the Company of each
Member being redeemed shall automatically terminate and be converted into the
right solely to receive such Member's pro rata share of the Redemption Amount
(or 75% of the Redemption Amount, as the case may be), and (ii) the applicable
amount shall be paid to Fleetwood or Cayuga, as the case may be, in cash within
10 days after the effective date of the Redemption; provided, however, that in
the case of a Redemption pursuant to Section 5.08 or Section 7.05(c), 7.05(d)
or 7.06(c), the applicable percentage of the Redemption Amount shall be payable
as and when dividends or distributions in respect of Interests are paid to the
remaining Members, pro rata based on the redeemed Members' aggregate percentage
interest in the Company at the time of the Redemption. In the event the
Company elects or is required to Effect a Redemption with respect to a Member
Group, the members of the Member Group not being redeemed who are Members shall
be obligated to cause such Redemption to be completed and to fund the
applicable Redemption Amount to the extent necessary.
IN WITNESS WHEREOF, Cayuga Associates L.P. and Fleetwood
Corp., being all of the Members of Devon Associates, a New York general
partnership, evidence their adoption and ratification of the foregoing
Partnership Agreement of the Company.
EXECUTED by each Member on the date indicated below:
CAYUGA ASSOCIATES L.P.
By: Cayuga Capital Corporation,
its general partner
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx
President
FLEETWOOD CORP.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxx
President
Dated: February 13, 1996
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The undersigned hereby accepts and agrees to be bound by the
provisions of this Agreement to the extent specified in Sections 7.05(b)(v).
NATIONAL PROPERTY INVESTORS, INC.
By: /s/
-----------------------------------
Dated: February 13, 1996
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SCHEDULE I
Percentage
Member Contribution Interest
------ ------------ --------
Cayuga Associates L.P. $670,000 67%
Fleetwood Corp. $330,000 33%
I-1
