AMENDED AND RESTATED AGREEMENT
OF
LIMITED PARTNERSHIP
OF
CAPITA PREFERRED FUNDING L.P.
Dated as of October __, 1996
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINED TERMS...................................... 2
Section 1.1 DEFINITIONS.............................................. 2
ARTICLE II
CONTINUATION OF THE PARTNERSHIP;
ADMISSION OF PARTNERSHIP PREFERRED SECURITIES HOLDERS;
WITHDRAWAL OF INITIAL LIMITED PARTNER...................... 11
Section 2.1 CONTINUATION OF THE PARTNERSHIP.......................... 11
Section 2.2 NAME..................................................... 11
Section 2.3 PURPOSES OF THE PARTNERSHIP.............................. 11
Section 2.4 TERM..................................................... 12
Section 2.5 REGISTERED AGENT AND OFFICE.............................. 12
Section 2.6 PRINCIPAL PLACE OF ACTIVITY.............................. 12
Section 2.7 NAME AND ADDRESS OF GENERAL PARTNER...................... 13
Section 2.8 QUALIFICATION TO CONDUCT ACTIVITIES...................... 13
Section 2.9 ADMISSION OF HOLDERS OF PARTNERSHIP
PREFERRED SECURITIES; WITHDRAWAL OF
INITIAL LIMITED PARTNER.................................. 13
ARTICLE III
CAPITAL CONTRIBUTIONS; REPRESENTATION OF
PARTNERSHIP PREFERRED SECURITY HOLDER'S INTEREST;
CAPITAL ACCOUNTS................................. 14
Section 3.1 CAPITAL CONTRIBUTIONS.................................... 14
Section 3.2 PARTNERSHIP PREFERRED SECURITY
HOLDER'S INTEREST REPRESENTED BY
PARTNERSHIP PREFERRED SECURITIES......................... 14
Section 3.3 CAPITAL ACCOUNTS......................................... 15
Section 3.4 INTEREST ON CAPITAL CONTRIBUTIONS........................ 15
Section 3.5 WITHDRAWAL AND RETURN OF CAPITAL
CONTRIBUTIONS............................................ 15
ARTICLE IV
ALLOCATIONS....................................... 16
Section 4.1 PROFITS AND LOSSES....................................... 16
Section 4.2 SPECIAL ALLOCATION....................................... 17
Section 4.3 WITHHOLDING.............................................. 19
ARTICLE V
DISTRIBUTIONS...................................... 20
Section 5.1 DISTRIBUTIONS............................................ 20
i
Page
----
Section 5.2 LIMITATIONS ON DISTRIBUTIONS............................. 20
ARTICLE VI
ISSUANCE OF PARTNERSHIP PREFERRED SECURITIES................... 20
Section 6.1 GENERAL PROVISIONS REGARDING PARTNERSHIP
PREFERRED SECURITIES..................................... 20
Section 6.2 PARTNERSHIP PREFERRED SECURITIES......................... 22
ARTICLE VII
PARTNERSHIP INVESTMENTS............................. 32
Section 7.1 INITIAL AFFILIATE INVESTMENT INSTRUMENTS................. 32
Section 7.2 REINVESTMENT OF PAYMENTS RECEIVED
BY THE PARTNERSHIP....................................... 33
ARTICLE VIII
BOOKS OF ACCOUNT, RECORDS AND REPORTS...................... 35
Section 8.1 BOOKS AND RECORDS........................................ 35
Section 8.2 ACCOUNTING METHOD........................................ 36
Section 8.3 ANNUAL AUDIT............................................. 36
ARTICLE IX
PAYMENT OF EXPENSES............................... 36
Section 9.1 PAYMENT OF TRUST EXPENSES AND PARTNERSHIP TAXES.......... 36
Section 9.2 PAYMENT OF OTHER PARTNERSHIP EXPENSES.................... 36
ARTICLE X
POWERS, RIGHTS AND DUTIES
OF THE LIMITED PARTNERS............................. 37
Section 10.1 LIMITATIONS.............................................. 37
Section 10.2 LIABILITY................................................ 37
Section 10.3 PRIORITY................................................. 38
ARTICLE XI
POWERS, RIGHTS AND DUTIES
OF THE GENERAL PARTNER.............................. 38
Section 11.1 AUTHORITY................................................ 38
Section 11.2 POWERS AND DUTIES OF GENERAL PARTNER..................... 38
Section 11.3 OBLIGATIONS AND EXPENSES PAYABLE BY
GENERAL PARTNER.......................................... 40
ii
Page
----
Section 11.4 LIABILITY................................................ 41
Section 11.5 OUTSIDE ACTIVITIES....................................... 00
Xxxxxxx 00.0 XXXXXX XX GENERAL PARTNER'S POWERS....................... 42
Section 11.7 EXCULPATION.............................................. 43
Section 11.8 FIDUCIARY DUTY........................................... 44
Section 11.9 INDEMNIFICATION.......................................... 45
Section 11.10 TAX MATTERS ............................................. 45
Section 11.11 CONSOLIDATION, MERGER OR SALE OF
ASSETS................................................... 46
ARTICLE XII
TRANSFERS OF INTERESTS BY PARTNERS........................ 48
Section 12.1 TRANSFER OF INTERESTS.................................... 48
Section 12.2 TRANSFER OF L.P. CERTIFICATES............................ 48
Section 12.3 PERSONS DEEMED PARTNERSHIP PREFERRED SECURITY HOLDERS.... 49
Section 12.4 BOOK ENTRY PROVISIONS.................................... 50
Section 12.5 REGISTRAR, TRANSFER AGENT AND PAYING AGENT............... 53
ARTICLE XIII
WITHDRAWAL, DISSOLUTION;
LIQUIDATION AND DISTRIBUTION OF ASSETS...................... 54
Section 13.1 WITHDRAWAL OF PARTNERS................................... 54
Section 13.2 DISSOLUTION OF THE PARTNERSHIP........................... 54
Section 13.3 LIQUIDATION.............................................. 55
Section 13.4 DISTRIBUTION IN LIQUIDATION.............................. 56
Section 13.5 RIGHTS OF LIMITED PARTNERS............................... 56
Section 13.6 TERMINATION.............................................. 57
ARTICLE XIV
AMENDMENTS AND MEETINGS............................. 57
Section 14.1 AMENDMENTS............................................... 57
Section 14.2 AMENDMENT OF CERTIFICATE................................. 57
Section 14.3 MEETINGS OF PARTNERS..................................... 58
ARTICLE XV
MISCELLANEOUS...................................... 59
Section 15.1 NOTICES.................................................. 59
Section 15.2 POWER OF ATTORNEY........................................ 60
Section 15.3 ENTIRE AGREEMENT......................................... 60
Section 15.4 GOVERNING LAW............................................ 61
Section 15.5 EFFECT................................................... 61
Section 15.6 PRONOUNS AND NUMBER...................................... 61
Section 15.7 CAPTIONS................................................. 61
iii
Page
----
Section 15.8 PARTIAL ENFORCEABILITY................................... 61
Section 15.9 COUNTERPARTS............................................. 61
Section 15.10 WAIVER OF PARTITION...................................... 62
Section 15.11 REMEDIES................................................. 62
Schedule 1 LIST OF PARTNERS
Annex A FORM OF L.P. CERTIFICATE
Exhibit A FORM OF INDENTURE OF AT&T CAPITAL CORPORATION
Exhibit B FORM OF INDENTURE FOR SUBSIDIARIES
iv
AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
OF
CAPITA PREFERRED FUNDING L.P.
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP of Capita
Preferred Funding L.P., a Delaware limited partnership (the "Partnership"),
dated as of October __, 1996, among AT&T Capital Corporation, a Delaware
corporation (the "Company"), as the general partner, Xxxxxxx X. Xxxx, an
individual, as the initial limited partner (the "Initial Limited Partner") and
such other Persons (as defined herein) who become Limited Partners (as defined
herein) as provided herein.
WHEREAS, Antigua Acquisition Corporation, a corporation recently
merged with and into the Company, and the Initial Limited Partner entered into
an Agreement of Limited Partnership, dated as of August 29, 1996, as amended by
that certain Amendment to Agreement of Limited Partnership of Capita Preferred
Funding L.P., dated October 2, 1996 by and between the Company and the Initial
Limited Partner (the "Original Partnership Agreement"), and the Partners (as
defined herein) desire to continue the Partnership under the Act (as defined
herein) and to amend and restate the Original Partnership Agreement in its
entirety;
WHEREAS, the Certificate of Limited Partnership of the Partnership
was filed with the Office of the Secretary of State of the State of Delaware on
August 29, 1996, as amended and restated by that certain Amended and Restated
Certificate of Limited Partnership of Capita Preferred Funding L.P., dated
October 2, 1996 and filed with the Office of the Secretary of State of the State
of Delaware on October 3, 1996;
NOW, THEREFORE, in consideration of the agreements and obligations
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree to amend
and restate the Original Partnership Agreement as follows:
ARTICLE I
DEFINED TERMS
Section 1.1 DEFINITIONS. Unless the context otherwise requires, the
terms defined in this Article I shall, for the purposes of this Agreement, have
the meanings herein specified. Terms used in this Agreement and not otherwise
defined herein shall have the meanings ascribed to such terms in the
Declaration.
"Act" means the Delaware Revised Uniform Limited Partnership Act,
Del. Code Xxx. tit. 6, 'ss' 17-101 et seq., as amended from time to time.
"Affiliate" has the meaning set forth in Section 1.1 of the
Declaration.
"Affiliate Investment Instruments" has the meaning set forth in
Section 7.1 of this Agreement.
"Agreement" means this Amended and Restated Agreement of Limited
Partnership, as it may be amended or supplemented from time to time.
"Beneficiaries" has the meaning set forth in Section 11.3 of this
Agreement.
"Book-Entry Interest" means a beneficial interest in the L.P.
Certificates, ownership and transfers of which shall be maintained and made
through book entries of a Clearing Agency as set forth in Section 12.4 of this
Agreement.
"Business Day" means a day other than a day on which banking
institutions in The City of New York are authorized or required by law to close.
"Capital Account" has the meaning set forth in Section 3.3 of this
Agreement.
"Certificate" means the Certificate of Limited Partnership of the
Partnership filed with the Secretary of State of the State of Delaware on August
29, 1996, as it may be amended and restated from time to time.
2
"Change in 1940 Act Law" has the meaning set forth in Section 1.1 of
the Declaration.
"Closing Date" has the meaning set forth in Section 1.1 of the
Declaration.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"Company" means AT&T Capital Corporation, a Delaware corporation.
"Compounded Distributions" has the meaning set forth in Section 6.2
of this Agreement.
"Declaration" means the Amended and Restated Declaration of Trust by
and among the Company, as Sponsor, the Property Trustee, the Delaware Trustee,
and the Regular Trustees, dated as of October __, 1996.
"Definitive L.P. Certificates" has the meaning set forth in Section
12.4(a) of this Agreement.
"Delaware Trustee" has the meaning set forth in Section 6.2 of the
Declaration.
"Distribution Payment Date" has the meaning set forth in Section
6.2(b)(ii) of this Agreement.
"Distributions" means the right to receive the amount of the
cumulative cash distributions payable by the Partnership with respect to the
Interests represented by the Partnership Preferred Securities, which amounts
will accrue on the $25 liquidation preference of each Partnership Preferred
Security from the Closing Date and are payable quarterly in arrears in
accordance with Sections 5.1 and 6.2(b) of this Agreement.
"DTC" means the Depository Trust Company, the initial Clearing
Agency.
"Eligible Debt Securities" means cash or book-entry securities,
negotiable instruments, or other securities of entities not affiliated with the
Company represented by instruments in registered form which evidence any of the
following: (a) any security issued or guaran-
3
xxxx as to principal or interest by the United States, or by a person controlled
or supervised by and acting as an instrumentality of the Government of the
United States pursuant to authority granted by the Congress of the United
States, or any certificate of deposit for any of the foregoing; (b) commercial
paper issued pursuant to Section 3(a)(3) of the Securities Act of 1933 (the
"Securities Act") and having, at the time of the investment or contractual
commitment to invest therein, a rating from each of S&P and Moody's in the
highest rating category granted by such rating agency and having a maturity not
in excess of nine months; (c) demand deposits, time deposits and certificates of
deposit which are fully insured by the FDIC; (d) repurchase obligations with
respect to any security that is a direct obligation of, or fully guaranteed by,
the Government of the United States of America or any agency or instrumentality
thereof, the obligations of which are backed by the full faith and credit of the
United States of America, in either case entered into with a depository
institution or trust company which is an Eligible Institution and the deposits
of which are insured by the FDIC; and (e) any other security which is identified
as a permitted investment of a finance subsidiary pursuant to Rule 3a-5 under
the 1940 Act at the time it is acquired by the Partnership.
"Eligible Institution" means a depository institution organized
under the laws of the United States of America or any one of the states thereof
or the District of Columbia (or any domestic branch of a foreign bank), (1)(i)
which has either (A) a long-term unsecured debt rating of AA or better by S&P
and Aa or better by Moody's or (B) a short-term unsecured debt rating or a
certificate of deposit rating of A-1+ or better by S&P and P-1 or better by
Moody's and (ii) whose deposits are insured by the FDIC or (2)(i) the parent of
which has a long-term or short-term unsecured debt rating which signifies
investment grade and (ii) whose deposits are insured by the FDIC.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
"Fiscal Period" means each calendar quarter.
4
"Fiscal Year" means (i) the period commencing upon the formation of
the Partnership and ending on December 31, 1996, and (ii) any subsequent
calendar year.
"General Partner" means AT&T Capital Corporation in its capacity as
the general partner of the Partnership, its permitted successors, or any
successor general partner in the Partnership admitted as such pursuant to the
terms of this Agreement.
"General Partner Capital Contribution" means the contribution by the
General Partner to the Partnership made contemporaneous with the issuance of the
Partnership Preferred Securities.
"General Partner Interest" means the Interest of the General Partner
in the Partnership.
"Holder" or "Partnership Preferred Security Holder" means a Limited
Partner in whose name an L.P. Certificate representing Partnership Preferred
Securities is registered.
"Indentures" means the Indentures between the Company or certain of
its subsidiaries, as the case may be, and ______________, as Indenture Trustee,
dated as of ___________, 1996, four of which are attached hereto as Exhibits A
and B, respectively.
"Independent Financial Adviser" shall mean (i) Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated or (ii) such other nationally recognized
investment banking firm which shall be designated by the Company and which firm
(1) does not (and whose directors, officers, employees and affiliates do not)
have a direct or indirect material equity interest in the Company or any of its
subsidiaries and (2) is either (a) ranked among the five largest underwriters of
debt or preferred securities (in terms of U.S. dollar value) in the United
States for the immediately preceding calendar year or (b) is approved by the
Holders of a Majority in Liquidation Preference of Partnership Preferred
Securities.
"Initial Affiliate Debentures" has the meaning set forth in Section
7.1(b) of this Agreement.
5
"Initial Company Debenture" has the meaning set forth in Section
7.1(b) of this Agreement.
"Initial Debentures" means collectively, the Initial Company
Debentures and the Initial Affiliate Debentures.
"Initial Limited Partner" means Xxxxxxx X. Xxxx, an individual.
"Initial Partnership Proceeds" means the aggregate proceeds received
by the Partnership from the sale of the Partnership Preferred Securities and the
General Partner Capital Contribution.
"Interest" means the entire ownership interest of a Partner in the
Partnership at any particular time, including, without limitation, its interest
in the capital, profits, and losses of, and distributions from, the Partnership.
"Investment Affiliate" means the Company or any corporation,
partnership, limited liability company or other entity (other than the
Partnership or the Trust) that is controlled by the Company and is not an
investment company by reason of Section 3(a) or 3(b) of the 1940 Act.
"Investment Event of Default" means an event of default under any
Affiliate Investment Instrument that is a debt instrument or the breach by an
Investment Affiliate of its obligations under any Affiliate Investment
Instrument that is an equity instrument.
"Investment Guarantee" has the meaning specified in Section 1.1 of
the Declaration.
"Investment Offer" has the meaning specified in Section 7.2(b) of
this Agreement.
"Limited Partner" means any Person who is admitted to the
Partnership as a limited partner pursuant to the terms of this Agreement, in
such Person's capacity as a limited partner of the Partnership.
"Liquidator" has the meaning specified in Section 13.3 of this
Agreement.
6
"L.P. Certificate" means a certificate substantially in the form
attached hereto as Annex A, evidencing the Partnership Preferred Securities held
by a Limited Partner.
"Majority in Liquidation Preference" means Holder(s) of Partnership
Preferred Securities who are the record owners of Partnership Preferred
Securities whose aggregate liquidation preferences represent more than 50% of
the aggregate liquidation preference of all Partnership Preferred Securities
then outstanding.
"Moody's" means Xxxxx'x Investors Service, Inc. or any successor
thereto.
"Net Income" and "Net Loss", respectively, for any Fiscal Period
mean the income and loss, respectively, of the Partnership for such Fiscal
Period as determined in accordance with the method of accounting followed by the
Partnership for United States federal income tax purposes, including, for all
purposes, the net income, if any, from the Affiliate Investment Instruments,
Eligible Debt Securities and any income exempt from tax and any noncapital,
nondeductible expenditures of the Partnership which are described in the Code.
"1940 Act" has the meaning set forth in Section 1.1 of the
Declaration.
"Original Partnership Agreement" has the meaning set forth in the
recitals to this Agreement.
"Partners" means the General Partner and the Limited Partners,
collectively, where no distinction is required by the context in which the term
is used.
"Partnership Covered Person" means any Partner, any Affiliate of a
Partner or any officers, directors, shareholders, partners, members, employees,
representatives or agents of a Partner of its respective Affiliates, or any
employee or agent of the Partnership or its Affiliates or any Special
Representative.
"Partnership Enforcement Event" has the meaning set forth in Section
6.2(h)(i) of this Agreement.
7
"Partnership Guarantee" means the Partnership Guarantee Agreement
dated as of October __, 1996 by the Company in favor of the Partnership
Preferred Security Holders with respect to the Partnership Preferred Securities,
as amended or supplemented from time to time.
"Partnership Indemnified Person" means the General Partner, any
Special Representative, any Affiliate of the General Partner or any Special
Representative or any officers, directors, shareholders, members, partners,
employees, representatives or agents of the General Partner or any Special
Representative, or any of their respective Affiliates, or any employee or agent
of the Partnership or its Affiliates.
"Partnership Investment Company Event" means that the General
Partner shall have requested and received an opinion of nationally recognized
independent legal counsel experienced in such matters to the effect that as a
result of the occurrence on or after the date hereof of a Change in 1940 Act
Law, the Partnership is or will be considered an "investment company" which is
required to be registered under the 1940 Act.
"Partnership Liquidation Distribution" has the meaning set forth in
Section 6.2(g) of this Agreement.
"Partnership Preferred Securities" represent the Interests of
Limited Partners and have the preference and designation set forth in Section
6.2(a) of this Agreement.
"Partnership Preferred Securities Purchase Agreement" means the
partnership purchase agreement between the Trust and the Partnership providing
for the purchase of the Partnership Preferred Securities.
"Partnership Preferred Security Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry Interest
as reflected on the books of DTC, or on the books of a Person maintaining an
account with DTC (directly as a participant or as an indirect participant, in
each case in accordance with the rules of DTC or such participant).
8
"Partnership Special Event" means either a Partnership Tax Event or
a Partnership Investment Company Event.
"Partnership Successor Securities" has the meaning set forth in
Section 11.11 of this Agreement.
"Partnership Tax Event" means that the General Partner shall have
requested and received an opinion of nationally recognized independent tax
counsel experienced in such matters to the effect that there has been a Tax
Action which affects any of the events described in (i) through (iii) below and
that there is more than an insubstantial risk that (i) the Partnership is, or
will be, subject to United States federal income tax with respect to income
accrued or received on the Affiliate Investment Instruments or the Eligible Debt
Securities, (ii) the Partnership is, or will be, subject to more than a de
minimis amount of other taxes, duties or other governmental charges or (iii)
interest payable by an Investment Affiliate with respect to any Debenture issued
by such Investment Affiliate to the Partnership is not, or will not be,
deductible by such Investment Affiliate for United States federal income tax
purposes.
"Paying Agent" shall have the meaning set forth in Section 12.5 of
this Agreement.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Power of Attorney" means the Power of Attorney granted pursuant to
Section 15.2 of this Agreement.
"Property Trustee" has the meaning set forth in Section 1.1 of the
Declaration.
"Record Date" means (i) as long as the Trust Preferred Securities
remain (or, in the event that the Trust is liquidated in connection with a Trust
Special Event, as long as the Partnership Preferred Securities remain) in
book-entry only form, one Business Day prior to the relevant payment dates and
(ii) in the event that
9
the Trust Preferred Securities (or in the event that the Trust is liquidated in
connection with a Trust Special Event, the Partnership Preferred Securities)
shall not continue to remain in book-entry only form, the 15th day of the month
of the relevant payment date.
"Redemption Notice" has the meaning set forth in Section 6.2(e) of
this Agreement.
"Redemption Price" has the meaning set forth in Section 6.2(c) of
this Agreement.
"Registrar" has the meaning set forth in Section 12.5 of this
Agreement.
"Regular Trustees" has the meaning set forth in Section 1.1 of the
Declaration.
"Reinvestment Criteria" has the meaning specified in Section 7.2(c)
of this Agreement.
"Special Representations" has the meaning set forth in Section
6.2(h)(i) of this Agreement.
"Tax Action" has the meaning set forth in Section 1.1 of the
Declaration.
"Tax Matters Partner" means the General Partner designated as such
in Section 11.10 of this Agreement.
"10% in Liquidation Preference" means Holders of the Partnership
Preferred Securities voting together as a single class representing 10% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of the Partnership
Preferred Securities.
"Treasury Regulations" has the meaning set forth in Section 1.1 of
the Declaration.
"Trust" means the Capita Preferred Trust, a Delaware business trust,
formed under the Declaration.
"Trust Common Securities" has the meaning specified in Section 8.1
of the Declaration.
10
"Trust Common Securities Guarantee" means the Trust Common
Securities Guarantee Agreement dated as of October __, 1996, entered into by the
Company, as Guarantor, for the benefit of the holders of the Trust Common
Securities.
"Trust Preferred Securities" has the meaning specified in Section
8.1 of the Declaration.
"Trust Preferred Securities Guarantee" means the Trust Preferred
Securities Guarantee Agreement dated as of October __, 1996, entered into by the
Company, as Guarantor, for the benefit of the holders of the Trust Preferred
Securities.
ARTICLE II
CONTINUATION OF THE PARTNERSHIP;
ADMISSION OF PARTNERSHIP PREFERRED SECURITIES HOLDERS;
WITHDRAWAL OF INITIAL LIMITED PARTNER
Section 2.1 CONTINUATION OF THE PARTNERSHIP. The parties hereto
agree to continue the Partnership in accordance with the terms of this
Agreement. The General Partner, for itself and as agent for the Limited
Partners, shall make every reasonable effort to assure that all certificates and
documents are properly executed and shall accomplish all filing, recording,
publishing and other acts necessary or appropriate for compliance with all the
requirements for the continuation of the Partnership as a limited partnership
under the Act and under all other laws of the State of Delaware or such other
jurisdictions in which the General Partner determines that the Partnership may
conduct activities. The rights and duties of the Partners shall be as provided
herein and, subject to the terms hereof, under the Act.
Section 2.2 NAME. The name of the Partnership is "Capita Preferred
Funding L.P.", as such name may be modified from time to time by the General
Partner following written notice to the Limited Partners.
Section 2.3 PURPOSES OF THE PARTNERSHIP. The purposes of the
Partnership are (a) to issue limited partnership interests in the Partnership in
the form of Partnership Preferred Securities, (b) to receive the
11
General Partner Capital Contribution, (c) to use substantially all of the
Initial Partnership Proceeds to purchase, as an investment, the Initial
Debentures, (d) to invest, at all times, an amount equal to at least 1% of the
Initial Partnership Proceeds in Eligible Debt Securities, (e) to receive
interest and other payments on the Affiliate Investment Instruments and the
Eligible Debt Securities held by the Partnership from time to time, (f) to make
Distributions on the Partnership Preferred Securities and distributions on the
General Partner Interest if, as and when declared by the General Partner in its
sole discretion, (g) subject to the restrictions and conditions contained in
this Agreement, to make additional investments in Affiliate Investment
Instruments and Eligible Debt Securities and to dispose of any such investments
and (h) except as otherwise limited herein, to enter into, make and perform all
contracts and other undertakings, and engage in those activities and
transactions as the General Partner may reasonably deem necessary or advisable
for the carrying out of the foregoing purposes of the Partnership. The
Partnership may not engage in any other activities or operations except as
contemplated by the preceding sentence.
Section 2.4 TERM. The term of the Partnership shall commence upon
the filing of the Certificate in the Office of the Secretary of State of the
State of Delaware and shall continue until the Partnership is dissolved in
accordance with the provisions of this Agreement.
Section 2.5 REGISTERED AGENT AND OFFICE. The Partnership's
registered agent and office in Delaware shall be Xxxxxxxx-Xxxx Corporation
System, Inc., 0000 Xxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx 00000.
At any time, the General Partner may designate another registered agent and/or
registered office.
Section 2.6 PRINCIPAL PLACE OF ACTIVITY. The principal place of
activity of the Partnership shall be c/o AT&T Capital Corporation, 00 Xxxxxxxx
Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000. Upon ten days' written notice to the
Partners, the General Partner may change the location of the Partnership's
principal place of activity, provided that such change has no material adverse
effect upon any Partner.
12
Section 2.7 NAME AND ADDRESS OF GENERAL PARTNER. The name and
address of the General Partner are as follows:
AT&T Capital Corporation
00 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Treasurer
The General Partner may change its name or address from time to time, in which
event the General Partner shall promptly notify the Limited Partners of any such
change.
Section 2.8 QUALIFICATION TO CONDUCT ACTIVITIES. The General Partner
shall cause the Partnership to become qualified, formed or registered under the
applicable qualification, fictitious name or similar laws of any jurisdiction in
which the Partnership conducts activities.
Section 2.9 ADMISSION OF HOLDERS OF PARTNERSHIP PREFERRED
SECURITIES; WITHDRAWAL OF INITIAL LIMITED PARTNER.
(a) Without execution of this Agreement, upon the receipt of an L.P.
Certificate by a Person, whether by purchase, gift, devise or other valid
transfer, which receipt shall be deemed to constitute a request by such Person
that the books and records of the Partnership reflect such Person's admission as
a Limited Partner, such Person shall be admitted to the Partnership as a Limited
Partner and shall become bound by this Agreement.
(b) Following the first admission of a Partnership Preferred
Security Holder to the Partnership as a Limited Partner, the Initial Limited
Partner shall withdraw from the Partnership and shall receive the return of its
capital contribution without interest or deduction.
(c) The name and mailing address of each Partner and the amount
contributed by such Partner to the capital of the Partnership shall be listed on
the books and records of the Partnership. The General Partner shall be required
to update the books and records from time to time as necessary to accurately
reflect such information.
13
ARTICLE III
CAPITAL CONTRIBUTIONS; REPRESENTATION OF
PARTNERSHIP PREFERRED SECURITY HOLDER'S INTEREST;
CAPITAL ACCOUNTS
Section 3.1 CAPITAL CONTRIBUTIONS.
(a) The General Partner has, prior to the date hereof, contributed
an aggregate of $15.00 to the capital of the Partnership, which amount is equal
to at least 15% of the total capital contributions to the Partnership, after
taking into account the contribution of the Initial Limited Partner referred to
in Section 3.1(b). Contemporaneous with the issuance of the Partnership
Preferred Securities, the General Partner shall make the General Partner Capital
Contribution. The General Partner shall, from time to time, make such additional
capital contributions as are necessary to maintain at all times a positive
Capital Account balance equal to at least one percent (1%) of the aggregate
positive Capital Account balances of all Partners at the end of such period.
(b) The Initial Limited Partner has, prior to the date hereof,
contributed the amount of $85.00 to the capital of the Partnership, which amount
shall be returned to the Initial Limited Partner as contemplated by Section
2.9(b).
(c) On the Closing Date, the Trust shall, in exchange for a
definitive L.P. Certificate contribute to the capital of the Partnership on
behalf of the Trust an amount in cash equal to the gross proceeds from the sale
of the Trust Preferred Securities and the Trust Common Securities (such amount
being a capital contribution to the Partnership). On such date, immediately
following the withdrawal of the Initial Limited Partner, the Trust shall be the
sole Limited Partner.
(d) No Limited Partner shall at any time be required to make any
additional capital contributions to the Partnership, except as may be required
by law.
Section 3.2 PARTNERSHIP PREFERRED SECURITY HOLDER'S INTEREST
REPRESENTED BY PARTNERSHIP PREFERRED SECURITIES. A Partnership Preferred
Security Holder's Interest shall be represented by the Partnership Preferred
Securities held by or on behalf of such Partner. Each Partnership Preferred
Security Holder's respective ownership of Partnership Preferred Securities shall
be
14
set forth on the books and records of the Partnership. Each Partner hereby
agrees that its Interest in the Partnership shall for all purposes be personal
property. No Partner shall have an interest in specific Partnership property.
Section 3.3 CAPITAL ACCOUNTS.
(a) Establishment and Maintenance of Capital Accounts. The
Partnership shall establish and maintain a separate account (the "Capital
Account") for each Partner. The initial balance of the Capital Account for each
Partner shall be the amount as set out opposite the name of each of the Partners
on Schedule 1 attached hereto. The Capital Account of each Partner shall be
increased by (i) the dollar amount of any additional contributions made by such
Partner and (ii) allocations to such Partner of income and gain (including
income exempt from tax). The Capital Account of each Partner shall be decreased
by (i) the dollar amount of any distributions made to such Partner, and (ii)
allocations to such Partner of loss and deduction (including noncapital,
nondeductible expenditures not deductible in computing the Partnership's income
or loss for United States federal income tax purposes).
(b) Compliance with Regulations. Notwithstanding any other provision
of this Agreement to the contrary, the provisions of Section 3.3(a) hereof
regarding the maintenance of Capital Accounts shall be construed so as to comply
with the Treasury Regulations promulgated under section 704 of the Code. The
General Partner, in its sole discretion, is authorized to modify such provisions
to the minimum extent necessary to comply with such Treasury regulations.
Section 3.4 INTEREST ON CAPITAL CONTRIBUTIONS. Except as provided
herein, no Partner shall be entitled to interest on or with respect to any
capital contribution to the Partnership.
Section 3.5 WITHDRAWAL AND RETURN OF CAPITAL CONTRIBUTIONS. Subject
to Section 3.1(b) hereof, no Partner shall be entitled to withdraw any part of
such Partner's capital contribution to the Partnership. No Partner shall be
entitled to receive any distributions
15
from the Partnership, except as provided in this Agreement.
ARTICLE IV
ALLOCATIONS
Section 4.1 PROFITS AND LOSSES. After giving effect to the special
allocation provisions set forth in Section 4.2 which special allocations shall
take precedence over any allocations made pursuant to this Section 4.1,
(a) the Partnership's Net Income for each Fiscal Period of the
Partnership shall be allocated as follows:
(i) First, to each Holder of a Partnership Preferred Security in an
amount equal to the excess, if any, of (x) all Net Losses, if any,
allocated to each such Holder from the date of issuance of the Partnership
Preferred Security through and including the close of such Fiscal Period
pursuant to Section 4.1(b)(ii) below over (y) the amount of Net Income, if
any, allocated to each such Holder pursuant to this Section 4.1(a)(i) in
all prior Fiscal Periods.
(ii) Second, to each Holder of a Partnership Preferred Security, an
amount of Net Income equal to the excess of (x) the Distributions accrued
on the Partnership Preferred Securities held by such Holder from the date
of their issuance through and including the last day of such Fiscal
Period, including any Compounded Distributions payable with respect
thereto, over (y) the amount of Net Income allocated to the Holders of the
Partnership Preferred Securities held by such Holder pursuant to this
Section 4.1(a)(ii) in all prior Fiscal Periods. Amounts allocated to all
Partnership Preferred Security Holders shall be allocated among such
Holders in proportion to the number of Partnership Preferred Securities
held by such Holders.
(iii) Any remaining Net Income shall be allocated to the General
Partner.
16
(b) The Partnership's Net Loss for any Fiscal Period shall be
allocated as follows:
(i) First, to the General Partner until the balance of the General
Partner's Capital Account is reduced to zero, provided, however, that the
aggregate amount of Net Losses allocated to the General Partner pursuant
to this Section 4.1(b)(i) shall not exceed the sum of 14% of the total
capital contributions of all Partners plus the aggregate Net Income
allocated to the General Partner pursuant to this Section 4.1.
(ii) Second, among the Holders in proportion to their respective
aggregate Capital Account balances, until the Capital Account balances of
such Holders are reduced to zero.
(iii) Any remaining Net Loss shall be allocated to the General
Partner.
(c) DAILY DETERMINATION. For purposes of determining the profits,
losses or any other items allocable to any period, profits, losses and any such
other items shall be determined on a daily basis, unless the General Partner
determines that another method is permissible under Section 704 of the Code and
the Treasury Regulations promulgated thereunder. Unless otherwise specified,
such profits, losses or other items shall be determined for each Fiscal Period.
Section 4.2 SPECIAL ALLOCATION.
(a) All expenditures that are (i) incurred by, or on behalf of, the
Partnership and (ii) paid, or otherwise reimbursed, by the General Partner out
of its own funds shall be allocated entirely to the General Partner.
(b) In the event any Partner unexpectedly receives any adjustments,
allocations or distributions described in Treasury Regulation Section 1.704-
1(b)(2)(ii)(d)(4), (5) or (6), items of the Partnership's Net Income shall be
specially allocated to such Partner in a manner sufficient to eliminate the
deficit, if any, in the balance of the Capital Account of such Partner as
quickly as possible. The foregoing is intended to be a "qualified income offset"
provision as described in Trea-
17
xxxx Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted and
applied in all respects in accordance with such Treasury Regulation.
(c) SECTION 704 COMPLIANCE. While this Agreement does not
specifically provide for certain provisions required by Treasury Regulation
Sections 1.704-1(b) and 1.704-2 because those provisions apply to transactions
that are not expected to occur as regards the Partnership, the Partners intend
that the allocations under Section 4.1 conform to Treasury Regulations Sections
1.704-1(b) and 1.704-2 (including, without limitation, the minimum gain
chargeback, chargeback of partner nonrecourse debt minimum gain and partner
nonrecourse debt provisions of such Treasury Regulations), and, to the extent
necessary due to the occurrence of unexpected events, the General Partner shall
make such changes in the allocations under Section 4.1 as it believes are
reasonably necessary to meet the requirements of such Treasury Regulations.
(d) ADJUSTMENT OF ALLOCATIONS. If the allocations set forth in this
Article IV are adjusted by the Internal Revenue Service and the Tax Matters
Partner agrees to such adjustments, such allocations shall be amended to the
minimum extent necessary to conform with such adjustments.
(e) ADDITIONAL ALLOCATIONS. Notwithstanding the foregoing, if, upon
the final dissolution and termination of the Partnership and after taking into
account all allocations of Net Income and Net Losses (and other tax items) under
this Article IV, the distributions to be made in accordance with the positive
Capital Account balances would result in a distribution that would be different
from a distribution under Article XIII, then gross items of income and gain (and
other tax items) for the taxable year of the final dissolution and termination
(and, to the extent permitted under section 761(c) of the Code, gross items of
income and gain, and other tax items, for the immediately preceding taxable
year) shall be allocated to the Partners to increase or decrease their
respective Capital Account balances so that the final distribution will occur in
the same manner as a distribution under Section 13.4.
18
(f) GENERAL PARTNER ALLOCATIONS. Notwithstanding any provision of
this Agreement to the contrary, the interest of the General Partner in each item
of Partnership income, gain, loss, deduction, or credit shall, at all times
during the existence of the Partnership, be equal to at least (A) at any time
that the aggregate capital contributions to the Partnership are equal to or less
than $50,000,000, one percent (1%) of each such item and (B) at any time that
the aggregate capital contributions to the Partnership are greater than
$50,000,000, at least a percentage equal to the product of (i) one percent (1%)
and (ii) a fraction (not exceeding 1 and not less the 0.2), the numerator of
which is $50,000,000 and the denominator of which is the lesser of (x) the
aggregate Capital Account balances of the Capital Accounts of all Partners at
such time and (y) the aggregate capital contributions to the Partnership of all
Partners at such time.
Section 4.3 WITHHOLDING. The Partnership shall comply with
withholding requirements under Federal, state and local law and shall remit
amounts withheld to and file required forms with applicable jurisdictions. To
the extent that the Partnership is required to withhold and pay over any amounts
to any authority with respect to distributions or allocations to any Partner,
the amount withheld shall be deemed to be a distribution in the amount of the
withholding to the Partner. In the event of any claimed over-withholding,
Partners shall be limited to an action against the applicable jurisdiction. If
the amount withheld was not withheld from actual distributions, the Partnership
may reduce subsequent distributions by the amount of such withholding. Each
Partner agrees to furnish the Partnership with any representations and forms as
shall reasonably be requested by the Partnership to assist it in determining the
extent of, and in fulfilling, its withholding obligations.
19
ARTICLE V
DISTRIBUTIONS
Section 5.1 DISTRIBUTIONS. Limited Partners shall receive periodic
Distributions and Compounded Distributions, if any, redemption payments and
liquidation distributions in accordance with the terms of the Partnership
Preferred Securities set forth in Article VI. The General Partner shall in its
sole discretion determine whether and when Distributions shall be payable;
provided, however, that if the General Partner shall determine a Distribution
will not be paid on a scheduled Distribution Payment Date, the General Partner
shall give notice of its determination not to pay Distributions to Limited
Partners of record as of the Record Date for the payment of such Distribution.
Section 5.2 LIMITATIONS ON DISTRIBUTIONS. The Partnership shall not
make a Distribution to any Partner on account of such Partner's Interest if such
Distribution would violate Section 17-607 of the Act or other applicable law.
ARTICLE VI
ISSUANCE OF PARTNERSHIP PREFERRED SECURITIES
Section 6.1 GENERAL PROVISIONS REGARDING PARTNERSHIP PREFERRED
SECURITIES.
(a) There is hereby authorized for issuance and sale Partnership
Preferred Securities having an aggregate liquidation preference not greater than
$________ and having the designation, annual distribution rate, liquidation
preference, redemption terms, and other powers, preferences and special rights
and limitations set forth in this Article VI.
(b) The payment of Distributions (including payments of
distributions by the Partnership in liquidation or on redemption in respect of
Partnership Preferred Securities) shall be guaranteed by the Company pursuant to
and to the extent set forth in the Partnership Guarantee. The Partnership
Preferred Security Holders hereby authorize the General Partner to hold the
Guarantee on
20
behalf of the Partnership Preferred Security Holders. In the event of an
appointment of a Special Representative pursuant to Section 6.2(i), among other
things, to enforce the Partnership Guarantee, the Special Representative may
take possession of the Partnership Guarantee for such purpose. If no Special
Representative has been appointed to enforce the Partnership Guarantee, the
General Partner has the right to enforce the Partnership Guarantee on behalf of
the Partnership Preferred Security Holders. The Partnership Preferred Security
Holders, by acceptance of such Partnership Preferred Securities, acknowledge and
agree to the subordination provisions in, and other terms of, the Partnership
Guarantee.
(c) The Partnership may not issue any interests in the Partnership
other than the Partnership Preferred Securities and the General Partner
Interest, provided that the Partnership may accept consideration for additional
capital contributions from the General Partner with respect to the General
Partner Interest. All Partnership Preferred Securities shall rank senior to all
other Interests in the Partnership in respect of the right to receive
Distributions or other distributions. All Partnership Preferred Securities
redeemed, purchased or otherwise acquired by the Partnership shall be canceled.
The Partnership Preferred Securities will be issued in registered form only.
(d) No Holder shall be entitled as a matter of right to subscribe
for or purchase, or have any preemptive right with respect to, any part of any
new or additional limited partnership interests, or of securities convertible
into any Partnership Preferred Securities or other limited partnership
interests, whether now or hereafter authorized and whether issued for cash or
other consideration or by way of a distribution.
(e) Any of the Partnership Preferred Securities that are owned by
the Company or by any entity more than 50% of which is owned by the Company,
either directly or indirectly, shall not be entitled to vote or consent with
respect to any Partnership Preferred Security owned by it, and shall, for
purposes of such vote or consent, be treated as if they were not outstanding;
provided, however, that persons otherwise eligible to vote to whom the Company
or any of its subsidiaries have pledged Partnership Preferred Securities may
vote or consent with
21
respect to such pledged Partnership Preferred Securities under any of the
circumstances described in Section 6.2.
Section 6.2 PARTNERSHIP PREFERRED SECURITIES.
(a) DESIGNATION. A total of ______ Partnership Preferred Securities,
liquidation preference $25 per Partnership Preferred Security, are hereby
designated as "__% Partnership Preferred Securities".
(b) DISTRIBUTIONS. (i) Partnership Preferred Security Holders shall
be entitled to receive cumulative Distributions and Compounded Distributions (as
defined below) (if any), if, as and when declared by the General Partner, in its
sole discretion, out of the assets of the Partnership legally available
therefor, at a rate per annum of ___% of the stated liquidation preference of
$25 per Partnership Preferred Security, calculated on the basis of a 360-day
year consisting of twelve 30-day months. For any period shorter than a full
90-day quarter, Distributions will be computed on the basis of the actual number
of days elapsed in such 90-day quarter. Such Distributions shall, from the date
of original issue, accrue and be cumulative and shall be payable quarterly,
when, if, and as declared by the General Partner on the dates specified in
Section 6.2(b)(ii) below. Distributions and Compounded Distributions (as defined
below) (if any) on the Partnership Preferred Securities shall be cumulative from
the Closing Date. Distributions not paid on the scheduled Distribution Payment
Date will accumulate and compound quarterly at the rate of [___]% per annum
("Compounded Distributions"). In the event that any date on which Distributions
are payable on the Partnership Preferred Securities is not a Business Day, then
payment of the Distribution payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
(ii) Distributions on the Partnership Preferred Securities will be
payable quarterly in arrears if, as and when, declared by the General Partner on
March 31, June 30, September 30 and December 31 of each year, com-
22
mencing on December 31, 1996 (each a "Distribution Payment Date").
Distributions will be payable to the Holders as they appear on the
books and records of the Partnership on the relevant Record Date. If the Trust
or the Property Trustee is the Holder of the Partnership Preferred Securities,
all distributions of cash shall be made by wire transfer of same day funds to
such Holder by 10:00 a.m., New York City time, on the applicable Distribution
Payment Date. Distributions payable on any Partnership Preferred Securities that
are not punctually paid on any Distribution Payment Date will cease to be
payable to the Person in whose name such Partnership Preferred Securities are
registered on the relevant record date, and such Distribution will instead be
payable to the Person in whose name such Partnership Preferred Securities are
registered on the special record date or other specified date for payment of
such defaulted or accrued Distribution.
(c) OPTIONAL REDEMPTION. Partnership Preferred Securities shall be
redeemable at the option of the General Partner, in whole or in part, from time
to time, on or after October 1, 2006, upon not less than 30 nor more than 60
days' notice, at an amount per Partnership Preferred Securities equal to $25
plus accrued and unpaid Distributions thereon, including any Compounded
Distributions (the "Redemption Price"). The Partnership may not redeem the
Partnership Preferred Securities in part unless all accumulated and unpaid
Distributions, including any Compounded Distributions, have been paid in full on
all Partnership Preferred Securities for all Fiscal Periods terminating on or
prior to the date of redemption. If a partial redemption of the Partnership
Preferred Securities would result in the delisting of the Trust Preferred
Securities (or, if the Trust is liquidated in connection with a Trust Special
Event, the delisting of the Partnership Preferred Securities), the Partnership
may only redeem the Partnership Preferred Securities in whole but not in part.
(d) SPECIAL EVENT REDEMPTIONS. (i) If, at any time, a Partnership
Special Event shall occur and be continuing, the General Partner shall, within
90 days following the occurrence of such Partnership Special Event, elect to
either (i) redeem the Partnership Pre-
23
ferred Securities in whole (but not in part), upon not less than 30 or more than
60 days' notice at the Redemption Price, provided that if at the time there is
available to the Partnership the opportunity to eliminate, within such 90-day
period, the Partnership Special Event by taking some ministerial action, such as
filing a form or making an election, or pursuing some other similar reasonable
measure that in the sole judgment of the General Partner has or will cause no
adverse effect on the Partnership, the Trust, or the Company, the General
Partner will pursue such measure in lieu of redemption; or (ii) cause the
Partnership Preferred Securities to remain outstanding, provided that in the
case of this clause (ii), the General Partner shall pay any and all costs and
expenses incurred by or payable by the Partnership which are attributable to the
Partnership Special Event.
(e) REDEMPTION PROCEDURES. (i) Notice of any redemption of
Partnership Preferred Securities (a "Redemption Notice") will be given by the
Partnership by mail to each Holder of Partnership Preferred Securities to be
redeemed not fewer than 30 nor more than 60 days before the date fixed for
redemption. For purposes of the calculation of the date of redemption and the
dates on which notices are given pursuant to this Section 6.2(e)(i), a
Redemption Notice shall be deemed to be given on the day such notice is first
mailed, by first-class mail, postage prepaid, to Holders of Partnership
Preferred Securities. Each Redemption Notice shall be addressed to the Holders
of Partnership Preferred Securities at the address of each such Holder appearing
in the books and records of the Partnership. No defect in the Redemption Notice
or in the mailing thereof with respect to any Holder shall affect the validity
of the redemption proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Partnership
Preferred Securities are to be redeemed, the Partnership Preferred Securities to
be redeemed shall be redeemed pro rata provided, that, in the event Partnership
Preferred Securities are held in book-entry only form by DTC or its nominee (or
any successor Clearing Agency or its nominee), DTC will reduce, in accordance
with DTC's customary procedures, the amount of the interest of each Clearing
Agency Participant in the Partnership Preferred Securities to be redeemed;
24
provided, that if, as a result of such pro rata redemption, Holders would hold
fractional interests in the Partnership Preferred Securities, the General
Partner will adjust the amount of the interest of each Holder to be redeemed may
be adjusted to avoid such fractional
interests.
(iii) If the Partnership gives a Redemption Notice (which notice
will be irrevocable), then by 12:00 noon, New York City time, on the redemption
date, the Partnership (A) if the Partnership Preferred Securities are in
book-entry only form with DTC, will deposit irrevocably with DTC funds
sufficient to pay the applicable Redemption Price and will give DTC irrevocable
instructions and authority to pay the Redemption Price in respect of the
Partnership Preferred Securities held through DTC in global form or (B) if the
Partnership Preferred Securities are held in certificated form, will deposit
with the Paying Agent, funds sufficient to pay the applicable Redemption Price
of the amount of any such Partnership Preferred Securities and will give to the
Paying Agent irrevocable instructions and authority to pay such amounts to the
Holders of Partnership Preferred Securities, upon surrender of their
certificates, by check, mailed to the address of the relevant Holder appearing
on the books and records of the Partnership on the redemption date; provided,
however, that for so long as the Trust or the Property Trustee of the Trust
shall hold the Partnership Preferred Securities, payment of cash shall be made
by wire in same day funds to the Holder by 12:00 Noon, New York City time, on
the redemption date. For these purposes, the applicable Redemption Price shall
not include Distributions which are being paid to Holders who were Holders on a
relevant record date. Upon satisfaction of the foregoing conditions, then
immediately prior to the close of business on the date of such deposit or
payment, all rights of Holders of such Partnership Preferred Securities so
called for redemption will cease, except the right of the Holders to receive the
Redemption Price, but without interest on such Redemption Price, and from and
after the date fixed for redemption, such Partnership Preferred Securities will
not accrue distributions or bear interest.
In the event that any date fixed for redemption of Partnership
Preferred Securities is not a Business Day, then payment of the Redemption Price
payable on such
25
date will be made on the next succeeding Business Day (and without any interest
in respect of any such delay), except that, if such Business Day falls in the
next calendar year, such payment will be made on the immediately preceding
Business Day in each case, with the same force and effect as if made on such
date fixed for redemption. In the event that payment of the Redemption Price is
improperly withheld or refused and not paid by either the Partnership or the
Company pursuant to the Partnership Guarantee, Distributions on the Partnership
Preferred Securities called for Redemption will continue to accrue, to the
extent that payment of such interest is legally available, from the original
redemption date until the Redemption Price is actually paid.
The Partnership shall not be required to register or cause to be
registered the transfer of any Partnership Preferred Securities which have been
called for redemption.
(f) COMPANY PURCHASES. Subject to the provisions of this Section 6.2
and applicable law (including, without limitation, Federal securities laws), if
Partnership Preferred Securities have been distributed to the Holders (as
defined in the Declaration) of Trust Preferred Securities, the Company or any of
its subsidiaries may at any time and from time to time purchase outstanding
Partnership Preferred Securities by tender, in the open market, or by private
agreement.
(g) LIQUIDATION DISTRIBUTION UPON DISSOLUTION. In the event of any
voluntary or involuntary liquidation, dissolution, winding-up or termination of
the Partnership, the Holders of Partnership Preferred Securities at the time
outstanding will be entitled to receive out of the assets of the Partnership
such amount as is determined in accordance with Section 13.4 (the "Partnership
Liquidation Distribution") payable in cash.
(h) VOTING RIGHTS.
(i) SPECIAL REPRESENTATIVE. (1) If one or more of the following
events shall occur and be continuing (each a "Partnership Enforcement Event"):
(i) arrearages on distributions on the Partnership Preferred Securities shall
exist for six consecutive quarterly distribution periods, (ii) the Company is in
default on
26
any of its obligations under the Partnership Guarantee or (iii) an Investment
Event of Default occurs and is continuing on any Affiliate Investment Instrument
or a default under any Investment Guarantee, as the case may be, the Holders of
the Partnership Preferred Securities, upon the affirmative vote of at least a
Majority in Liquidation Preference of the Partnership Preferred Securities,
shall have the right, to the exclusion of the General Partner, (a) to appoint
and authorize a special representative of the Partnership and the Limited
Partners (a "Special Representative") to enforce (1) to the maximum extent
permitted by applicable law, the Partnership's creditors' rights and other
rights with respect to the Affiliate Investment Instruments and the Investment
Guarantees, (2) the rights of the Holders of the Partnership Preferred
Securities under the Partnership Guarantee, and (3) the rights of the Holders of
the Partnership Preferred Securities to receive Distributions (only if, and to
the extent, declared by the General Partner, in its sole discretion, out of
funds legally available therefor) on the Partnership Preferred Securities, and
(b) under the Partnership Guarantee to enforce the terms of the Partnership
Guarantee, including the right to enforce the covenant restricting certain
payments of the Company and its majority owned subsidiaries. Under no
circumstances, however, shall the Special Representative have authority to cause
the General Partner to declare Distributions on the Partnership Preferred
Securities nor to have any authority concerning the selection of Partnership
Investments. When the Special Representative acts to enforce the Partnership's
creditors' rights and other rights with respect to the Affiliate Investment
Instruments and the Investment Guarantees, the Special Representative acts as an
agent of the Partnership. When the Special Representative acts to enforce the
rights of the Holders of the Partnership Preferred Securities under the
Partnership Guarantee or their rights to receive Distributions on the
Partnership Preferred Securities, the Special Representative acts as an agent of
the Holders of the Partnership Preferred Securities. In addition, the Special
Representative shall not, by virtue of acting in such capacity, be admitted as a
general or limited partner in the Partnership or otherwise be deemed to be a
general or limited partner in the Partnership and shall have no liability for
the debts, obligations, or liabilities of the Partnership.
27
(2) In furtherance of the foregoing, and without limiting the powers
of any Special Representative so appointed and to avoid any doubt concerning the
powers of the Special Representative, any Special Representative, in its own
name, in the name of the Partnership, in the name of the Limited Partners, or
otherwise, may institute, or cause to be instituted, a proceeding, including,
without limitation, any suit in equity, an action at law or other judicial or
administrative proceeding, to enforce on behalf of the Partnership the
Partnership's rights directly against the Company or any other obligor in
connection with its obligations to the Partnership, and may prosecute such
proceeding to judgment or final decree, and enforce the same against the Company
or any other obligor in connection with such obligations and collect, out of the
property, wherever situated, of the Company or any such other obligor upon such
obligations, the monies adjudged or decreed to be payable in the manner provided
by law. The General Partner agrees to execute and deliver such documents as may
be necessary, appropriate or convenient for the Special Representative to
enforce the foregoing rights and obligations on behalf and in the name of the
Partnership.
(3) For purposes of determining whether the Partnership has deferred
payment of Distributions for six (6) consecutive quarters, Distributions shall
be deemed to remain in arrears, notwithstanding any payments in respect thereof,
until full cumulative Distributions, including Compounded Distributions, have
been or contemporaneously are paid with respect to all quarterly Distribution
periods terminating on or prior to the date of payment of such full cumulative
Distributions. Not later than 30 days after such right to appoint a Special
Representative arises, the General Partner will convene a meeting for election
of a Special Representative. If the General Partner fails to convene such
meeting within such 30-day period, the Holders of not less than 10% in
Liquidation Preference of the Outstanding Partnership Preferred Securities will
be entitled to convene such meeting. The provisions of Section 14.3 relating to
the convening and conduct of meetings of the Partners will apply with respect to
any such meeting. In the event that, at any such meeting, Holders of less than a
Majority in Liquidation Preference of Partnership Preferred Securities entitled
to vote for the appointment of a Special Representative vote for such
appointment, no
28
Special Representative shall be appointed. Any Special Representative appointed
shall cease to be a Special Representative of the Partnership and/or the Limited
Partners if (x) the Partnership (or the Company pursuant to the Partnership
Guarantee) shall have paid in full all accrued and unpaid Distributions on the
Partnership Preferred Securities, (y) the relevant Investment Event of Default
shall have been cured, and (z) the Company is in compliance with all its
obligations under the Partnership Guarantee, and the Company, in its capacity as
the General Partner, shall continue the activities of the Partnership without
dissolution. Notwithstanding the appointment of any such Special Representative,
the Company shall continue as General Partner and shall retain all rights under
this Agreement, including the right to determine whether to declare, in its sole
discretion, the payment of Distributions on the Partnership Preferred
Securities.
(ii) CERTAIN AMENDMENTS; WAIVER. (1) If any proposed amendment of
this Agreement provides for, or the General Partner otherwise proposes to
effect, (x) any action that would adversely affect the powers, preferences or
special rights of the Holders of the Partnership Preferred Securities, whether
by way of amendment of this Agreement or otherwise (including, without
limitation, the authorization or issuance of any limited partnership interests
in the Partnership ranking, as to participation in profits or distributions, or
in the assets of the Partnership, senior to the Partnership Preferred
Securities); or (y) the dissolution, winding-up or termination of the
Partnership, other than (1) in connection with the occurrence of a Partnership
Special Event or (2) as described under Sections 11.11 and 13.2 of this
Agreement, then the Holders of outstanding Partnership Preferred Securities will
be entitled to vote on such amendment or proposal of the General Partner (but
not on any other amendment or proposal) as a class and such amendment or
proposal shall not be effective except with the approval of Holders of a
Majority in Liquidation Preference of such outstanding Partnership Preferred
Securities having a right to vote on the matter; provided, however, that if the
Property Trustee on behalf of the Trust is the Holder of the Partnership
Preferred Securities, any such amendment or proposal not excepted by (1) or (2)
above shall not be effective without the prior or concurrent approval of the
Holders of a majority in liquidation amount of the
29
outstanding Trust Preferred Securities having a right to vote on such matters;
provided, further that no such approval shall be required if the dissolution,
winding-up or termination of the Partnership is proposed or initiated upon the
initiation of proceedings, or after proceedings have been initiated, for the
dissolution, winding-up, liquidation or termination of the Company.
(2) The Holders of a Majority in Liquidation Preference of
Partnership Preferred Securities may, by vote, on behalf of the Holders of all
of the Partnership Preferred Securities, waive any past Partnership Enforcement
Event with respect to the Partnership Preferred Securities and its consequences;
provided that, if the underlying Investment Event of Default:
(A) is not waivable under the related Affiliate Investment Instrument,
such Partnership Enforcement Event shall also not be waivable; or
(B) requires the consent or vote of the Holders of greater than a
majority in principal amount or liquidation preference of the
Affiliate Investment Instruments (a "Super Majority") to be waived
under the related Affiliate Investment Instrument, the Partnership
Enforcement Event may only be waived by the vote of the Holders of
the relevant Super Majority in liquidation amount of the Partnership
Preferred Securities.
Upon such waiver, any such Partnership Enforcement Event shall cease to exist,
and shall be deemed to have been cured, for every purpose of this Agreement, but
no such waiver shall extend to any subsequent or other Partnership Enforcement
Event or impair any right consequent thereon.
(3) A waiver of an Investment Event of Default by the Special
Representative, acting at the direction of the Holders of the Partnership
Preferred Securities, constitutes a waiver of the corresponding Partnership
Enforcement Event.
(iii) GENERAL VOTING. (1) Neither the General Partner nor the
Special Representative shall (i) direct the time, method and place of conducting
any proceeding for any remedy available, (ii) waive any In-
30
vestment Event of Default that is waivable under the Affiliate Investment
Instruments, (iii) exercise any right to rescind or annul a declaration that the
principal of any Affiliate Investment Instruments that are debt instruments
shall be due and payable, (iv) waive the breach of the covenant by the Company
in the Partnership Guarantee to restrict certain payments by the Company and its
majority owned subsidiaries, or (v) consent to any amendment, modification or
termination of any Affiliate Investment Instrument, where such consent shall be
required from the investor, without, in each case, obtaining the prior approval
of the Holders of at least a Majority in Liquidation Preference of the
Partnership Preferred Securities; provided, however, that if the Property
Trustee on behalf of the Trust is the Holder of the Partnership Preferred
Securities, such waiver, consent or amendment or other action shall not be
effective without the prior or concurrent approval of at least a majority in
liquidation amount of the outstanding Trust Preferred Securities having a right
to vote on such matters. The General Partner shall not revoke any action
previously authorized or approved by a vote of the Holders of the Partnership
Preferred Securities. The General Partner shall notify all Holders of the
Partnership Preferred Securities of any notice of an Investment Event of Default
received with respect to any Affiliate Investment Instrument.
(2) Any required approval of Holders of Partnership Preferred
Securities may be given at a separate meeting of such Holders convened for such
purpose or pursuant to written consent. The General Partner will cause a notice
of any meeting at which Holders of Partnership Preferred Securities are entitled
to vote, or of any matter upon which the action by written consent of such
Holders is to be taken, to be mailed to each Holder of record of Partnership
Preferred Securities. Each such notice will include a statement setting forth
(x) the date of such meeting or the date by which such action is to be taken,
(y) a description of any matter proposed for adoption at such meeting on which
such Holders are entitled to vote or of such matters upon which written consent
is sought and (z) instructions for the delivery of proxies or consents. No vote
or consent of the Holders of Partnership Preferred Securities will be required
for the Partnership to redeem and cancel Partnership Preferred Securities in
accordance with this Agreement.
31
(3) Notwithstanding that Holders of Partnership Preferred Securities
are entitled to vote or consent under any of the circumstances described above,
any of the Partnership Preferred Securities at such time that are owned by the
Company or by any entity more than 50% of which is owned by the Company, either
directly or indirectly, shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if they were not outstanding;
provided, however, that persons otherwise eligible to vote to whom the Company
or any of its subsidiaries have pledged Partnership Preferred Securities may
vote or consent with respect to such pledged Partnership Preferred Securities
under any of the circumstances described herein.
(4) Holders of the Partnership Preferred Securities shall have no
rights to remove or replace the General Partner.
(5) Holders of Partnership Preferred Securities shall have no
preemptive rights.
ARTICLE VII
PARTNERSHIP INVESTMENTS
Section 7.1 INITIAL AFFILIATE INVESTMENT INSTRUMENTS.
(a) All Partnership funds will be invested in the securities of
Investment Affiliates (the "Affiliate Investment Instruments") and Eligible Debt
Securities. No more than 99% of the Initial Partnership Proceeds will be used by
the Partnership to purchase the Initial Debentures meeting the criteria set
forth in this Section 7.1. The remaining funds from the Initial Partnership
Proceeds will be used to purchase Eligible Debt Securities in accordance with
the terms of this Agreement.
(b) The Partnership shall apply approximately 99% of the Initial
Partnership Proceeds to purchase (1) a debt instrument of the Company (the
"Initial Company Debenture") in the aggregate principal amount of $___________
and (2) a debt instrument of a wholly owned United States subsidiary of the
Company and a debt instrument of a second wholly owned United States subsid-
32
iary of the Company (such debt instruments collectively referred to as the
"Initial Affiliate Debentures"). The Initial Company Debenture and the Initial
Affiliate Debentures are collectively referred to as the "Initial Debentures".
The Partnership may purchase the Initial Debentures only upon receipt of an
opinion of the Independent Financial Advisor to the effect that (i) if such
Initial Debentures were to be rated, at least one Rating Agency would rate all
the Initial Debentures investment grade at the time such Initial Debentures are
purchased by the Partnership, (ii) the Company and each Investment Affiliate
which is a subsidiary of the Company would have been capable of issuing and
selling debt instruments with the same terms and conditions as the applicable
Initial Debentures to unrelated third party investors, (iii) the terms and
conditions of the Initial Debentures are consistent with the terms and
conditions of a public offering or a private placement pursuant to Rule 144A
under the Securities Act of 1933 of such Initial Debentures and are no more
favorable to the relevant Investment Affiliate than could have been obtained by
such Investment Affiliate from unrelated third party investors pursuant to such
a public offering or private placement of such Initial Debentures. On the
Closing Date, the Partnership shall invest at least 1% of such Initial
Partnership Proceeds in Eligible Debt Securities. The terms of the Initial
Debentures will be as set forth in the Indentures attached hereto as Exhibits A
and B.
Section 7.2 REINVESTMENT OF PAYMENTS RECEIVED BY THE PARTNERSHIP.
(a) The Partnership must at all times invest an amount equal to at
least 1% of the Initial Partnership Proceeds in Eligible Debt Securities.
(b) The Partnership may reinvest any payments it receives in respect
of its investments in (i) Eligible Debt Securities without limitation or (ii)
additional Affiliate Investment Instruments but only upon (A) the acceptance of
a written offer setting forth the terms and conditions on which an Investment
Affiliate would be willing to issue an Affiliate Investment Instrument to the
Partnership (an "Investment Offer") and (B) the receipt of an opinion of the
Independent Financial Advisor that the terms of such Affiliate Investment
Instru-
33
ment set forth in such Investment Offer satisfy the Reinvestment Criteria (as
defined below).
(c) If the Independent Financial Advisor determines that the terms
of an Affiliate Investment Instrument (as set forth in the Investment Offer) do
not satisfy the Reinvestment Criteria, the Partnership shall be prohibited from
making any investment in such Affiliate Investment Instrument.
(d) Each Affiliate Investment Instrument shall satisfy the following
criteria (the "Reinvestment Criteria"): (i) the economic terms of each Affiliate
Investment Instrument shall be no less favorable to the Partnership than terms
that would otherwise be obtainable through a public offering or private
placement under Rule 144A of the Securities Act of 1933 of securities by the
requesting Investment Affiliate and any other the terms and conditions of each
Affiliate Reinvestment Instrument are substantially similar to the terms and
conditions of similar securities that are offered to the public in a public
offering or private placement under Rule 144A of the Securities Act of 1933 of
such securities; (ii) the Partnership shall not have held any Affiliate
Investment Instruments of the Investment Affiliate submitting the Investment
Offer within the three-year period ending on the date of the Investment Offer;
(iii) there shall not have been a default on any debt obligation of the
Investment Affiliate submitting the Investment Offer that was owned by the
Partnership; (iv) no dividend arrearages shall have existed on any equity
security of the Investment Affiliate submitting the Investment Offer that was
owned by the Partnership; and (v) the Investment Affiliate submitting the
Investment Offer shall not be deemed to be an investment company by reason of
Section 3(a) or 3(b) of the 1940 Act.
(e) Any payments received by the Partnership in respect of its
investments that are not invested in additional Affiliate Investment
Instruments, may be reinvested only in Eligible Debt Securities.
34
ARTICLE VIII
BOOKS OF ACCOUNT, RECORDS AND REPORTS
Section 8.1 BOOKS AND RECORDS.
(a) Proper and complete records and books of account of the
Partnership shall be kept by the General Partner, in which shall be entered
fully and accurately all transactions and other matters relative to the
Partnership's investments. The books and records of the Partnership, together
with a certified copy of this Agreement and of the Certificate, shall at all
times be maintained at the principal office of the General Partner and shall be
open to the inspection and examination of the Partners or their duly authorized
representatives for any proper purpose reasonably related to its Interest during
reasonable business hours.
(b) Notwithstanding any other provision of this Agreement to the
contrary, the General Partner may, to the maximum extent permitted by applicable
law, keep confidential from the Partners any information with respect to the
Partnership, the disclosure of which the General Partner reasonably believes is
not in the best interests of the Partnership, or is adverse to the interests of
the Partnership, or which the Partnership or the General Partner is required by
law or by an agreement with any Person to keep confidential.
(c) (i) For so long as the Partnership Preferred Securities are held
by the Property Trustee on behalf of the Trust, within one month after the close
of each Fiscal Year, the General Partner shall transmit to each Partner a
statement indicating such Partner's share of each item of Partnership income,
gain, loss, deduction or credit, for United States federal income tax purposes,
for such Fiscal Year.
(ii) In the event that the Partnership Preferred Securities are no
longer held by the Property Trustee on behalf of the Trust, as soon as
reasonably possible after the close of the Fiscal Year, the General Partner
shall transmit to each Partner the statement referred to in Section 8.1(c)(i)
hereof.
35
Section 8.2 ACCOUNTING METHOD. For both financial and tax reporting
purposes, the books and records of the Partnership shall be kept on the accrual
method of accounting applied on a consistent basis and shall reflect all
Partnership transactions.
Section 8.3 ANNUAL AUDIT. As soon as practical after the end of each
Fiscal Year, but not later than 90 days after such end, the financial statements
of the Partnership shall be audited by a firm of independent certified public
accountants selected by the General Partner in accordance with applicable law.
The cost of such audits will be an expense of the Partnership and shall be paid
by the General Partner.
ARTICLE IX
PAYMENT OF EXPENSES
Section 9.1 PAYMENT OF TRUST EXPENSES AND PARTNERSHIP TAXES. Since
the Trust is being formed solely to facilitate a direct investment in the
Partnership Preferred Securities, the Partnership hereby agrees, at any time
while the Property Trustee is the Holder of any Partnership Preferred
Securities, to pay all the expenses of the Trust, including, but not limited to,
any taxes, duties, assessments or governmental charges of whatever nature (other
than withholding taxes) imposed on the Trust by the United States, or any other
taxing authority, so that the net amounts received and retained by the Trust and
the Property Trustee after paying such expenses will be equal to the amounts the
Trust and the Property Trustee would have received had no such costs or expenses
been incurred by or imposed on the Trust. The General Partner shall be liable
for, and shall pay all such expenses solely out of its own funds. In addition,
if the Partnership is required to pay any taxes, duties, assessments or
governmental charges of whatever nature (other than withholding taxes) imposed
by the United States, or any other taxing authority, then, in any case, the
General Partner will pay such taxes, duties, assessments or other governmental
charges out of its own funds.
Section 9.2 PAYMENT OF OTHER PARTNERSHIP EXPENSES. In connection
with the offering, sale and
36
issuance of the Partnership Preferred Securities by the Partnership, the General
Partner shall:
(a) pay all costs and expenses of the Partnership (including, but
not limited to, costs and expenses relating to the organization of the
Partnership, the offering, sale and issuance of the Partnership Preferred
Securities (including commissions to the underwriters in connection therewith)
the fees and expenses of the Special Representatives (if any), and the costs and
expenses relating to the operation of the Partnership, including, without
limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel and telephone and other telecommunications expenses; and
(b) be primarily and fully liable for any indemnification
obligations arising with respect to this Agreement.
ARTICLE X
POWERS, RIGHTS AND DUTIES
OF THE LIMITED PARTNERS
Section 10.1 LIMITATIONS. The Limited Partners shall not participate
in the management or control of the Partnership's investment activity, property
or other assets, nor shall the Limited Partners engage in any activities for the
Partnership, nor shall the Limited Partners have the power to act for or bind
the Partnership, such powers being vested solely and exclusively in the General
Partner (and, upon appointment, and to the extent set forth herein, the Special
Representative). The Limited Partners shall have such rights as are set forth
herein and in the Partnership Guarantee. The Limited Partners shall have no
interest in the properties or assets of the General Partner, or any equity
therein, or in any proceeds of any sales thereof (which sales shall not be
restricted in any respect), by virtue of acquiring or owning an Interest in the
Partnership.
Section 10.2 LIABILITY. Subject to the provisions of the Act, no
Limited Partner shall be liable for
37
the repayment, satisfaction or discharge of any debts or other obligations of
the Partnership in excess of the Capital Account balance of such Limited
Partner.
Section 10.3 PRIORITY. No Limited Partner shall have priority over
any other Limited Partner as to Partnership allocations or distributions.
ARTICLE XI
POWERS, RIGHTS AND DUTIES
OF THE GENERAL PARTNER
Section 11.1 AUTHORITY. Subject to the provisions of Section
6.2(h)(i) with respect to the Special Representative, the General Partner shall
have exclusive and complete authority and discretion to manage the operations
and affairs of the Partnership and to make all decisions regarding the
investment activity of the Partnership. Any action taken by the General Partner
shall constitute the act of and serve to bind the Partnership. In dealing with
the General Partner acting on behalf of the Partnership no Person shall be
required to inquire into the authority of the General Partner to bind the
Partnership. Persons dealing with the Partnership are entitled to rely
conclusively on the power and authority of the General Partner as set forth in
this Agreement.
Section 11.2 POWERS AND DUTIES OF GENERAL PARTNER. Subject to the
provisions of Section 6.2(h)(i) with respect to the Special Representative, the
General Partner shall have all rights and powers of a general partner under the
Act, and shall have all authority, rights and powers in the management of the
Partnership's investment activity to do any and all other acts and things
necessary, proper, convenient or advisable to effectuate the purposes of this
Agreement, including by way of illustration but not by way of limitation, the
following:
(a) to secure the necessary goods and services required in
performing the General Partner's duties for the Partnership;
(b) to exercise all powers of the Partnership, on behalf of the
Partnership, in connection with
38
enforcing the Partnership's rights under the Affiliate Investment
Instruments and the Partnership Guarantee;
(c) to issue Partnership Preferred Securities and to admit Limited
Partners in connection therewith in accordance with this Agreement;
(d) to act as registrar and transfer agent for the Partnership
Preferred Securities or designate an entity to act as registrar and
transfer agent;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including with
respect to Distributions and voting rights and to make determinations as
to the payment of Distributions, and make or cause to be made all other
required payments to Holders of the Partnership Preferred Securities and
to the General Partner;
(f) to open, maintain and close bank accounts and to draw checks and
other orders for the payment of money;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Partnership;
(h) to deposit, withdraw, invest, pay, retain and distribute the
Partnership's funds in a manner consistent with the provisions of this
Agreement;
(i) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Partnership's valid existence,
rights, franchises and privileges as a limited partnership under the laws
of the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Limited
Partners or to enable the Partnership to invest in the Affiliate
Investment Instruments and Eligible Debt Securities;
(j) to take all action not inconsistent with applicable law, the
Certificate or this Agreement,
39
that the General Partner or, upon appointment pursuant to Section
6.2(h)(i), the Special Representative determines in its sole discretion to
be necessary or desirable to ensure, as long as such action does not
adversely affect the interests of the Partnership Preferred Security
Holders, or cause (i) the Partnership to be deemed to be an "investment
company" required to be registered under the 1940 Act, (ii) any Initial
Debenture (or any subsequent Affiliate Investment Instrument that is
intended to be classified as debt) to not be treated as indebtedness for
United States federal income tax purposes, or (iii) the Partnership to be
treated as an association, or as a publicly traded partnership, taxable as
a corporation;
(k) to cause the Partnership to enter into and perform the
Partnership Preferred Securities Purchase Agreement and to purchase
Eligible Debt Securities and Affiliate Investment Instruments, as the case
may be, without any further act, vote or approval of any Partner; and
(l) to execute and deliver any and all documents or instruments,
perform all duties and powers and do all things for and on behalf of the
Partnership in all matters necessary or desirable or incidental to the
foregoing.
Section 11.3 OBLIGATIONS AND EXPENSES PAYABLE BY GENERAL PARTNER.
(a) The General Partner hereby assumes and shall be liable for the debts,
obligations and liabilities of the Partnership, including, but not limited to,
any liabilities arising under the Securities Act or the Exchange Act and all
costs and expenses relating to the investment by the Partnership in any
Affiliate Investment Instruments (but not any losses related to any non-payment
with respect to such investments), and agrees to pay to each Person to whom the
Partnership is now or hereafter becomes indebted or liable (the
"Beneficiaries"), whether such indebtedness, obligations or liabilities arise in
contract, tort or otherwise (excluding payment obligations of the Company to
Holders of the Partnership Preferred Securities in such Holders' capacities as
Holders of such Partnership Preferred Securities, such obligations being
separately guaranteed under the Partnership Guarantee), the full payment of such
indebtedness
40
and any and all liabilities, when and as due. This Agreement is intended to be
for the benefit of and to be enforceable by all such Beneficiaries whether or
not such Beneficiaries have received notice hereof.
(b) The General Partner agrees to pay and be responsible for:
(i) all costs and expenses of the Partnership including, but
not limited to, costs and expenses relating to the organization of the
Partnership, the offering, sale and issuance of Partnership Preferred
Securities, the costs and expenses relating to the operation of the Partnership
(including without limitation, costs and expenses of accountants, attorneys,
statistical or bookkeeping services, expenses for printing and engraving and
computing or accounting equipment, paying agent(s), registrar(s), transfer
agents, duplicating, travel and telephone and other telecommunications expenses)
and costs and expenses incurred in connection with the acquisition, financing,
and disposition of the Partnership's assets; and
(ii) any and all taxes (other than Federal, state and local
withholding taxes) and all liabilities, costs and expenses with respect to such
taxes of the Partnership.
Section 11.4 LIABILITY. Except as expressly set forth in this
Agreement or in the Guarantee Agreements, (a) the General Partner shall not be
personally liable for the return of any portion of the capital contributions (or
any return thereon) of the Limited Partners; (b) the return of such capital
contributions (or any return thereon) shall be made solely from assets of the
Partnership; and (c) the General Partner shall not be required to pay to the
Partnership or to any Limited Partner any deficit in any Limited Partner's
Capital Account upon dissolution, winding up or otherwise. Other than as
expressly provided in this Agreement or under the Act, no Limited Partner shall
have the right to demand or receive property other than cash for its respective
Interest in the Partnership. The General Partner shall be liable to an unlimited
extent for the debts and other obligations of the Partnership.
41
Section 11.5 OUTSIDE ACTIVITIES. Any Partner or Affiliate thereof
may engage in or possess an interest in other ventures of any nature or
description, independently or with others, similar or dissimilar to the
activities of the Partnership, and the Partnership and the Partners shall have
no rights by virtue of this Agreement in and to such independent ventures or the
income or profits derived therefrom, and the pursuit of any such venture, even
if competitive with the activities of the Partnership, shall not be deemed
wrongful or improper. No Partner or Affiliate thereof shall be obligated to
present any particular investment opportunity to the Partnership even if such
opportunity is of a character that, if presented to the Partnership, could be
taken by the Partnership, and any Partner or Affiliate thereof shall have the
right to take for its own account (individually or as a partner or fiduciary) or
to recommend to others any such particular investment opportunity.
Section 11.6 LIMITS ON GENERAL PARTNER'S POWERS. Anything in this
Agreement to the contrary notwithstanding, the General Partner shall not cause
or permit the Partnership to:
(i) acquire any assets other than as expressly provided
herein;
(ii) do any act which would make it impractical or impossible
to carry on the ordinary activity of the Partnership as set forth in
Section 2.3;
(iii) possess Partnership property for other than a
Partnership purpose;
(iv) admit a Person as a Partner, except as expressly provided
in this Agreement;
(v) make any advances of funds to the General Partner or its
Affiliates, other than such as represented by the Affiliate Investment
Instruments;
(vi) perform any act that would subject any Limited Partner to
liability as a general partner in any jurisdiction;
42
(vii) engage in any activity that is not consistent with the
purposes of the Partnership, as set forth in Section 2.3;
(viii) without the written consent of the Holders of 66-2/3%
in Liquidation Preference of the Partnership Preferred Securities, have an
order for relief entered with respect to the Partnership or commence a
voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consent to the entry of an
order for relief in an involuntary case under any such law, or consent to
the appointment of or taking possession by a receiver, trustee or other
custodian for all or a substantial part of the Partnership's property, or
make any assignment for the benefit of creditors of the Partnership; or
(ix) borrow money or become liable for the borrowings of any
third party or to engage in any financial or other trade or business.
Section 11.7 EXCULPATION. (a) No Partnership Indemnified Person
shall be liable, responsible or accountable in damages or otherwise to the
Partnership or any Partnership Covered Person for any loss, damage or claim
incurred by reason of any act or omission performed or omitted by such
Partnership Indemnified Person in good faith on behalf of the Partnership and in
a manner such Partnership Indemnified Person reasonably believed to be within
the scope of the authority conferred on such Partnership Indemnified Person by
this Agreement or by law, except that a Partnership Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such Partnership
Indemnified Person's gross negligence or willful misconduct with respect to such
acts or omissions.
(b) A Partnership Indemnified Person shall be fully protected in
relying in good faith upon the records of the Partnership and upon such
information, opinions, reports or statements presented to the Partnership by any
Person as to matters the Partnership Indemnified Person reasonably believes are
within such other Person's professional or expert competence and who has been
selected with reasonable care by or on behalf of the Partnership, including
information, opinions, reports or statements as
43
to the value and amount of the assets, liabilities, profits, losses, or any
other facts pertinent to the existence and amount of assets from which
distributions to Partners might properly be paid.
Section 11.8 FIDUCIARY DUTY. (a) To the extent that, at law or in
equity, a Partnership Indemnified Person has duties (including fiduciary duties)
and liabilities relating thereto to the Partnership or to any other Partnership
Covered Person, a Partnership Indemnified Person acting under this Agreement
shall not be liable to the Partnership or to any other Partnership Covered
Person for its good faith reliance on the provisions of this Agreement. The
provisions of this Agreement, to the extent that they restrict the duties and
liabilities of a Partnership Indemnified Person otherwise existing at law or in
equity, are agreed by the parties hereto to replace such other duties and
liabilities of such Partnership Indemnified Person.
(b) Unless otherwise expressly provided herein, (i) whenever a
conflict of interest exists or arises between Partnership Covered Persons, or
(ii) whether this Agreement or any other agreement contemplated herein or
therein provides that a Partnership Indemnified Person shall act in a manner
that is, or provides terms that are, fair and reasonable to the Partnership or
any Partner, the Partnership Indemnified Person shall resolve such conflict of
interest, take such action or provide such terms, considering in each case the
relative interest of each party (including its own interest) to such conflict,
agreement, transaction or situation and the benefits and burdens relating to
such interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Partnership Indemnified Person, the resolution, action or term so
made, taken or provided by the Partnership Indemnified Person shall not
constitute a breach of this Agreement or any other agreement contemplated herein
or of any duty or obligation of the Partnership Indemnified Person at law or in
equity or otherwise.
(c) Whenever in this Agreement a Partnership Indemnified Person is
permitted or required to make a decision (i) in its "discretion" or under a
grant of similar authority, the Partnership Indemnified Person
44
shall be entitled to consider such interests and factors as it desires,
including its own interest, and shall have no duty or obligation to give any
consideration to any interest of or factors affecting the Partnership or any
other Person, or (ii) in its "good faith" or under another express standard, the
Partnership Indemnified Person shall act under such express standard and shall
not be subject to any other or different standard imposed by this Agreement or
by applicable law.
Section 11.9 INDEMNIFICATION. (a) To the fullest extent permitted by
applicable law, the Partnership shall indemnify and hold harmless each
Partnership Indemnified Person from and against any loss, damage or claim
incurred by such Partnership Indemnified Person by reason of any act or omission
performed or omitted by such Partnership Indemnified Person in good faith on
behalf of the Partnership and in a manner such Partnership Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Partnership Indemnified Person by this Agreement, except that no Partnership
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Partnership Indemnified Person by reason of
gross negligence or willful misconduct with respect to such acts or omissions;
provided, however, that any indemnity under this Section 11.9 shall be provided
out of and to the extent of Partnership assets only, and no Partnership Covered
Person shall have any personal liability on account thereof.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by a Partnership Indemnified Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Partnership prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by the Partnership of an
undertaking by or on behalf of the Partnership Indemnified Person to repay such
amount if it shall be determined that the Partnership Indemnified Person is not
entitled to be indemnified as authorized in Section 11.9(a).
Section 11.10 TAX MATTERS
(a) For purposes of section 6231(a)(7) of the Code, the "Tax Matters
Partner" shall be the Company as
45
long as it remains the general partner of the Partnership. The Tax Matters
Partner shall keep the Limited Partners fully informed of any inquiry,
examination or proceeding.
(b) Neither the Partnership, nor the Tax Matters Partner on behalf
of the Partnership, shall make an election under section 754 of the Code.
(c) The General Partner and the Partnership Preferred Security
Holders acknowledge that they intend, for United States federal income tax
purposes, that the Partnership shall be treated as a "partnership" (other than a
publicly traded partnership taxable as a corporation) and that the General
Partner and the Partnership Preferred Security Holders shall be treated as
"partners" of the Partnership.
(d) The General Partner shall retain, at the expense of the
Partnership and at its sole discretion, a nationally recognized firm of
certified public accountants which shall prepare all United States federal,
state, local or other tax and information returns of the Partnership, as
required by law, and the Schedule K-1's or any successor or similar forms or
schedules.
Section 11.11 CONSOLIDATION, MERGER OR SALE OF ASSETS. The
Partnership may not consolidate, amalgamate, merge with or into, or be replaced
by, or convey, transfer or lease its properties and assets substantially as an
entirety to, any corporation or other body, except as permitted pursuant to this
Section 11.11. The Partnership may, without the consent of the Holders of the
Partnership Preferred Securities, consolidate, amalgamate, merge with or into,
or be replaced by a limited partnership, limited liability company or trust
organized as such under the laws of any state of the United States of America,
provided that (i) such successor entity either (x) expressly assumes all of the
obligations of the Partnership under the Partnership Preferred Securities or (y)
substitutes for the Partnership Preferred Securities other securities having
substantially the same terms as the Partnership Preferred Securities (the
"Partnership Successor Securities") so long as the Partnership Successor
Securities are not junior to any other equity securities of the successor
entity, with respect to participation in the profits and distributions, and in
the
46
assets, of the successor entity, (ii) the Investment Affiliates expressly
acknowledge such successor entity as the holder of the Affiliate Investment
Instruments, (iii) the Partnership Preferred Securities continue to be or any
Partnership Successor Securities are or will be listed, upon notification of
issuance, on any national securities exchange or other organization on which the
Partnership Preferred Securities, if so listed, are then listed, (iv) such
merger, consolidation, amalgamation or replacement does not cause the Trust
Preferred Securities (or, in the event that the Trust is liquidated in
connection with a Trust Special Event, the Partnership Preferred Securities
(including any Partnership Successor Securities)) to be downgraded by any
nationally recognized statistical securities rating organization, (v) such
merger, consolidation, amalgamation or replacement does not adversely affect the
powers, preferences and other special rights of the holders of the Trust
Preferred Securities or the Holders of the Partnership Preferred Securities
(including any Partnership Successor Securities)) in any material respect (other
than, in the case of the Partnership Preferred Securities, with respect to any
dilution of the Holders' interest in the new resulting entity), (vi) such
successor entity has a purpose substantially identical to that of the
Partnership, (vii) prior to such merger, consolidation, amalgamation or
replacement, the Company has received an opinion of nationally recognized
independent counsel to the Partnership experienced in such matters to the effect
that (A) such successor entity will be treated as a "partnership" for United
States federal income tax purposes and not as an association or a publicly
traded partnership taxable as a corporation, (B) such merger, consolidation,
amalgamation or replacement will not cause the Trust to be classified as an
association or a publicly traded partnership taxable as a corporation for United
States federal income tax purposes, (C) following such merger, consolidation,
amalgamation or replacement, the Company and such successor entity will be in
compliance with the 1940 Act without registering thereunder as an investment
company, and (D) such merger, consolidation, amalgamation or replacement will
not adversely affect the limited liability of the Holders of the Partnership
Preferred Securities and (viii) the Company guarantees the obligations of such
successor entity under the Partnership Successor Securities at least to the
extent provided by the Partnership Guarantee.
47
ARTICLE XII
TRANSFERS OF INTERESTS BY PARTNERS
Section 12.1 TRANSFER OF INTERESTS.
(a) Partnership Preferred Securities shall be freely transferable by
a Holder.
(b) Except as provided in the next sentence, the General Partner may
not assign or transfer its Interest in the Partnership in whole or in part
unless, prior to such assignment or transfer, the General Partner has obtained
the consent of the Holders of not less than 66-2/3% in Liquidation Preference
of the Partnership Preferred Securities. The General Partner may assign or
transfer its Interest in the Partnership without such consent only to an entity
that is the survivor of a merger or consolidation of the General Partner in a
transaction that meets the requirements of Section 11.11 and only if prior to
such assignment or transfer the Company has received an opinion of nationally
recognized independent tax counsel to the Partnership experienced in such
matters to the effect that after such assignment or transfer the Partnership
will continue to be treated as a partnership for United States federal income
tax purposes and will not be treated as an association or a publicly traded
partnership taxable as a corporation. "Permitted Successor" shall mean an entity
that is an assignee or transferee of the Interest of the General Partner as
permitted by this Section 12.1(b). The admission of a Permitted Successor as a
general partner of the Partnership shall be effective upon the filing of an
amendment to the Certificate with the Secretary of State of the State of
Delaware which indicates that the Permitted Successor has been admitted as a
general partner of the Partnership. If the General Partner assigns its entire
Interest, the General Partner shall cease to be a general partner of the
Partnership simultaneously with the admission of the Permitted Successor as a
general partner of the Partnership. Any such Permitted Successor is hereby
authorized to and shall continue the business of the Partnership without
dissolution.
(c) Except as provided above, no Interest shall be transferred, in
whole or in part, except in
48
accordance with the terms and conditions set forth in this Agreement. Any
transfer or purported transfer of any Interest not made in accordance with this
Agreement shall be null and void.
Section 12.2 TRANSFER OF L.P. CERTIFICATES. The General Partner
shall provide for the registration of L.P. Certificates and of transfers of L.P.
Certificates. Upon surrender for registration of transfer of any L.P.
Certificate, the General Partner shall cause one or more new L.P. Certificates
to be issued in the name of the designated transferee or transferees. Every L.P.
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the General Partner duly
executed by the Partnership Preferred Security Holder or his or her attorney
duly authorized in writing. Each L.P. Certificate surrendered for registration
of transfer shall be cancelled by the General Partner. A transferee of an L.P.
Certificate shall be admitted to the Partnership as a Limited Partner, shall
become bound by this Agreement and shall be entitled to the rights and subject
to the obligations of a Partnership Preferred Security Holder hereunder upon the
receipt by the transferee of an L.P. Certificate, which receipt shall be deemed
to constitute a request by such transferee that the books and records of the
Partnership reflect such transferee's admission as a limited partner. The
transferor of an L.P. Certificate, in whole, shall cease to be a Limited Partner
at the time that the transferee of such L.P. Certificate is admitted to the
Partnership as a Limited Partner in accordance with this Section 12.2.
Section 12.3 DEFINITIVE L.P. CERTIFICATES; PERSONS DEEMED
PARTNERSHIP PREFERRED SECURITY HOLDERS. (a) DEFINITIVE L.P. CERTIFICATES. Unless
and until the Partnership issues a global L.P. Certificate pursuant to Section
12.4(a), the Partnership shall only issue definitive L.P. Certificates to the
Partnership Preferred Security Holders. (b) The Partnership may treat the Person
in whose name any L.P. Certificate shall be registered on the books and records
of the Partnership as the sole holder of such L.P. Certificate and of the
Partnership Preferred Securities represented by such L.P. Certificate for
purposes of receiving Distributions and for all other purposes whatsoever
(including without limitation, tax returns and information reports) and, accord-
49
ingly, shall not be bound to recognize any equitable or other claim to or
interest in such L.P. Certificate or in the Partnership Preferred Securities
represented by such L.P. Certificate on the part of any other Person, whether or
not the Partnership shall have actual or other notice thereof.
Section 12.4 BOOK ENTRY PROVISIONS.
(a) General. The provisions of this Section 12.4 shall apply only in
the event that the Partnership Preferred Securities are distributed to the
Holders of Trust Securities in connection with the involuntary or voluntary
dissolution, winding up or liquidation of the Trust as a result of the
occurrence of a Trust Special Event. Upon the occurrence of such event, a global
L.P. Certificate representing the Book-Entry Interests, shall be delivered to
DTC, the initial Clearing Agency, by, or on behalf of, the Partnership and any
previously issued and still outstanding definitive L.P. Certificates shall be of
no further force and effect. The global L.P. Certificate shall initially be
registered on the books and records of the Partnership in the name of Cede &
Co., the nominee of DTC, and no Holder of a Partnership Preferred Security will
receive a new definitive L.P. Certificate representing such Holder's interests
in such L.P. Certificate, except as provided in Section 12.4(c). In connection
with the involuntary or voluntary dissolution, winding up or liquidation of the
Trust as a result of the occurrence of a Trust Special Event, Cede & Co., the
nominee of DTC, shall automatically be admitted to the Partnership as a Limited
Partner. Receipt of the global L.P. Certificate shall be deemed to constitute a
request by Cede & Co., the nominee of DTC, that the books and records of the
Partnership reflect its admission as a Limited Partner. Unless and until new
definitive, fully registered L.P. Certificates (the "Definitive L.P.
Certificates") have been issued to the Partnership Preferred Security Owners
pursuant to Section 12.4(c):
(i) The provisions of this Section shall be in full force and
effect;
(ii) The Partnership, the General Partner and any Special
Representative shall be entitled to deal with the Clearing Agency for all
purposes of this Agreement (including the payment of Distributions,
50
Redemption Price and liquidation proceeds on the L.P. Certificates and
receiving approvals, votes or consents hereunder) as the Partnership
Preferred Security Holder and the sole holder of the L.P. Certificates and
shall have no obligation to the Partnership Preferred Security Owners;
(iii) None of the Partnership, the Trust, the General Partner, any
Special Representative or any agents of any of the foregoing shall have
any liability or responsibility for any aspect of the records relating to
or payments made on account of beneficial ownership interests in a global
L.P. Certificate for such beneficial ownership interests or for
maintaining, supervising or reviewing any records relating to such
beneficial ownership interests; and
(iv) Except as provided in Section 12.4(c) below, the Holders of
Partnership Preference Securities will not be entitled to receive physical
delivery of the Partnership Preferred Securities in definitive form and
will not be considered Holders thereof for any purpose under this
Agreement, and no global L.P. Certificate representing Partnership
Preferred Securities shall be exchangeable, except for another global L.P.
Certificate of like denomination and tenor to be registered in the name of
DTC or Cede & Co., or to a successor Depositary or its nominee.
Accordingly, each Partnership Preferred Security Owner must rely on the
procedures of DTC or if such person is not a Participant, on the
procedures of the Participant through which such person owns its interest
to exercise any rights of a Holder under the Agreement.
(b) NOTICES TO CLEARING AGENCY. Whenever a notice or other
communication to the Partnership Preferred Security Holders is required under
this Agreement, unless and until Definitive L.P. Certificates shall have been
issued to the Partnership Preferred Security Owners pursuant to Section 12.4(c),
the General Partner and any Special Representative shall give all such notices
and communications specified herein to be given to the Partnership Preferred
Security Holders to the Clearing Agency, and shall have no obligations to the
Partnership Preferred Security Owners.
51
(c) DEFINITIVE L.P. CERTIFICATES. Definitive L.P. Certificates shall
be prepared by the Partnership and exchangeable for the global L.P. Certificate
or L.P. Certificates if and only if (i) the Depositary notifies the Company that
it is unwilling or unable to continue its services as a securities depositary
and no successor depositary shall have been appointed, (ii) the Depositary, at
any time, ceases to be a clearing agency registered under the Exchange Act at
such time as the Depositary is required to be so registered to act as such
depositary and no successor depositary shall have been appointed, or (iii) the
Company, in its sole discretion, determines that such global L.P. Certificate
shall be so exchangeable. Upon surrender of the global L.P. Certificate or L.P.
Certificates representing the Book-Entry Interests by the Clearing Agency,
accompanied by registration instructions, the General Partner shall cause
Definitive L.P. Certificates to be delivered to Partnership Preferred Security
Owners in accordance with the instructions of the Clearing Agency. Neither the
General Partner nor the Partnership shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Any Person receiving a Definitive L.P.
Certificate in accordance with this Section 12.4 shall be admitted to the
Partnership as a Limited Partner upon receipt of such Definitive L.P.
Certificate and shall be registered on the books and records of the Partnership
as a Partnership Preferred Security Holder. The Clearing Agency or the nominee
of the Clearing Agency, as the case may be, shall cease to be a Limited Partner
under this Section 12.4(c) at the time that at least one additional Person is
admitted to the Partnership as a Limited Partner in accordance herewith. The
Definitive L.P. Certificates shall be printed, lithographed or engraved or may
be produced in any other manner as may be required by any national securities
exchange on which Partnership Preferred Securities may be listed and is
reasonably acceptable to the General Partner, as evidenced by its execution
thereof.
52
Section 12.5 REGISTRAR, TRANSFER AGENT AND PAYING AGENT.
(a) The General Partner will act as Registrar, Transfer Agent and
Paying Agent for the Partnership Preferred Securities for so long as the
Partnership Preferred Securities are held by the Trust or, if the Trust is
liquidated in connection with a Trust Special Event, for so long as the
Partnership Preferred Securities remain in book-entry only form.
(b) Except in such case where the General Partner shall act as
Registrar or Paying Agent pursuant to Section 12.5(a) hereof, the Partnership
shall maintain in the Borough of Manhattan, City of New York, State of New York
(i) an office or agency where Partnership Preferred Securities may be presented
for registration of transfer or for exchange ("Registrar") and (ii) an office or
agency where Partnership Preferred Securities may be presented for payment
("Paying Agent"). The Registrar shall keep a register of the Partnership
Preferred Securities and of their transfer and exchange. The Partnership may
appoint the Registrar and the Paying Agent and may appoint one or more
co-registrars and one or more additional paying agents in such other locations
as it shall determine. The term "Paying Agent" includes any additional paying
agent. The Partnership may change any Paying Agent, Registrar or co-registrar
without prior notice to any Holder. If the Partnership fails to appoint or
maintain another entity as Registrar or Paying Agent, the General Partner shall
act as such.
(c) Registration of transfers of Partnership Preferred Securities
shall be effected without charge by or on behalf of the Partnership, but upon
payment (with the giving of such indemnity as the Partnership or the General
Partner may require) in respect of any tax or other governmental charges that
may be imposed.
(d) The Partnership will not be required to register or cause to be
registered the transfer of Partnership Preferred Securities after such
Partnership Preferred Securities have been called for redemption.
53
ARTICLE XIII
WITHDRAWAL, DISSOLUTION;
LIQUIDATION AND DISTRIBUTION OF ASSETS
Section 13.1 WITHDRAWAL OF PARTNERS. The General Partner shall not
at any time retire or withdraw from the Partnership except as otherwise
permitted hereunder. If the General Partner retires or withdraws in
contravention of this Section 13.1, it shall indemnify, defend and hold harmless
the Partnership and the other Partners from and against any losses, expenses,
judgments, fines, settlements or damages suffered or incurred by the Partnership
or such other Partners arising out of or resulting from such retirement or
withdrawal.
Section 13.2 DISSOLUTION OF THE PARTNERSHIP.
(a) The Partnership shall not be dissolved by the admission of
Partners in accordance with the terms of this Agreement. The death, withdrawal,
bankruptcy or dissolution of a Limited Partner, or the occurrence of any other
event which terminates the Interest of a Limited Partner in the Partnership,
shall not, in and of itself, cause the Partnership to be dissolved and its
affairs wound up. To the fullest extent permitted by applicable law, upon the
occurrence of any such event, the General Partner may, without any further act,
vote on approval of any Partner, admit any Person to the Partnership as an
additional or substitute limited partner in the Partnership, which admission
shall be effective as of the date of the occurrence of such event, and the
business of the Partnership shall be continued without dissolution.
(b) The Partnership shall be dissolved and its affairs shall be
wound up upon the earliest to occur of any of the following events:
(i) upon the bankruptcy or insolvency of the General Partner;
(ii) the Partnership has redeemed or otherwise purchased all of the
Partnership Preferred Securities;
54
(iii) the entry of a decree of judicial dissolution under Section
17-802 of the Act; or
(iv) the written consent of all Partners.
(c) Upon dissolution of the Partnership, the Liquidator shall
promptly notify the Partners of such dissolution.
Section 13.3 LIQUIDATION.
(a) In the event of the dissolution of the Partnership for any
reason, the General Partner (or, if the Partnership is dissolved pursuant to
Section 13.2(b)(i) or (ii), then a liquidating agent appointed by Holders of not
less than 66 2/3% in Liquidation Preference of the Partnership Preferred
Securities (the General Partner or such Person so appointed is hereinafter
referred to as the "Liquidator")) shall commence to wind up the affairs of the
Partnership and to liquidate the Partnership's assets; provided, however, that a
reasonable time shall be allowed for the orderly liquidation of the assets of
the Partnership and the satisfaction of liabilities to creditors so as to enable
the Partners to minimize the normal losses attendant upon liquidation. The
Partners shall continue to share all income, losses and distributions during the
period of liquidation in accordance with Articles IV and V. Subject to the
provisions of this Article XIII, the Liquidator shall have full right and
unlimited discretion to determine the time, manner and terms of any sale or
sales of Partnership property pursuant to such liquidation, giving due regard to
the activity and condition of the relevant market and general financial and
economic conditions.
(b) The Liquidator shall have all of the rights and powers with
respect to the assets and liabilities of the Partnership in connection with the
liquidation and termination of the Partnership that the General Partner would
have with respect to the assets and liabilities of the Partnership during the
term of the Partnership, and the Liquidator is hereby expressly authorized and
empowered to execute any and all documents necessary or desirable to effectuate
the liquidation and termination of the Partnership and the transfer of any
assets.
55
(c) Notwithstanding the foregoing, a Liquidator that is not a
General Partner shall not, by virtue of acting in such capacity, be deemed a
Partner in this Partnership and shall not have any of the economic interests in
the Partnership of a Partner; and such Liquidator may be compensated for its
services to the Partnership at normal customary and competitive rates for its
services to the Partnership as reasonably determined by all the Limited
Partners.
Section 13.4 DISTRIBUTION IN LIQUIDATION. The proceeds of
liquidation shall be applied in the following order of priority (and without
regard to the non-mandatory provisions of Section 17-804 of the Act):
(i) first, to creditors of the Partnership, including Partners who
are creditors, to the extent otherwise permitted by law, in satisfaction
of the liabilities of the Partnership (whether by payment or the making of
reasonable provisions for payment thereof), other than liabilities for
distributions (including Distributions) to Partners;
(ii) second, following any allocations required under Section 4.2(e)
of the Agreement, to the Limited Partners, an amount equal to the
aggregate liquidation preference of their Partnership Preferred
Securities, plus the amount of Distributions (including any Compounded
Distributions) that are accrued and unpaid as of the date of such
liquidating distribution; and
(iii) thereafter, to the General Partner.
Section 13.5 RIGHTS OF LIMITED PARTNERS. Each Limited Partner shall
look solely to the assets of the Partnership for all distributions with respect
to the Partnership and such Partner's capital contribution (including returns
thereof), and such Partner's share of profits or losses thereof, and shall have
no recourse therefor (upon dissolution or otherwise) against the General
Partner, except under the Partnership Guarantee. No Partner shall have any right
to demand or receive property other than cash upon dissolution and termination
of the Partnership.
56
Section 13.6 TERMINATION. The Partnership shall terminate when all
of the assets of the Partnership shall have been disposed of and the assets
shall have been distributed as provided in Section 13.4 and the Liquidator has
executed and caused to be filed a certificate of cancellation of the
Partnership.
ARTICLE XIV
AMENDMENTS AND MEETINGS
Section 14.1 AMENDMENTS. Except as provided by Section 3.3(b) and
Section 6.2(i), this Agreement may be amended by, and only by, a written
instrument executed by the General Partner without the consent of any Limited
Partner; provided, however, that no amendment shall be made, and any such
purported amendment shall be void and ineffective, to the extent the result
thereof would be to (A) cause the Partnership to be treated for United States
federal income tax purposes as an association or a publicly traded partnership
taxable as a corporation, (B) require the Partnership to register under the 1940
Act or (C) materially adversely affect the rights, privileges or preferences of
the Partnership Preferred Securities. Notwithstanding any provision to the
contrary, in the event of (i) a liquidation of the Trust for any reason or (ii)
any other distribution which effectively causes Partnership Preferred Securities
to be distributed to Holders of Trust Preferred Securities, the General Partner
may amend this Agreement without the consent of the Limited Partners to provide
for (A) orderly dissemination, purchase, sale, exchange and replacement of such
Partnership Preferred Securities, (B) all other matters to the extent required
by or desirable under then applicable law and (C) such other matters reasonably
incidental or related thereto; provided, however, that no such amendment may
materially adversely affect the rights, privileges, or preferences of the
Partnership Preferred Securities without the consent of a majority in interest
of the Partners so effected.
Section 14.2 AMENDMENT OF CERTIFICATE. In the event this Agreement
shall be amended pursuant to Section 14.1, the General Partner shall amend the
Certificate to reflect such change if it deems such amendment of the Certificate
to be necessary or appropriate.
57
Section 14.3 MEETINGS OF PARTNERS.
(a) Meetings of the Limited Partners who are Holders may be called
at any time by the General Partner to consider and act on any matter on which
Limited Partners are entitled to act under the terms of this Agreement or the
Act. The General Partner shall call a meeting of Holders if directed to do so by
Holders of no less than 10% in Liquidation Preference as permitted by this
Agreement. Such direction shall be given by delivering to the General Partner a
request in writing stating that the signing Limited Partners desire to call a
meeting and indicating the general or specific purpose for which the meeting is
to be called. Any Limited Partners calling a meeting shall specify in writing
the L.P. Certificates held by the Limited Partners exercising the right to call
a meeting and only those specified Interests shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met. Except to the extent otherwise provided in this
Agreement, the following provisions shall apply to meetings of Partners.
(b) Notice of any such meeting shall be given to all Limited
Partners having a right to vote thereat not less than seven Business Days nor
more than 60 days prior to the date of such meeting. Each such notice shall set
forth the date, time and place of the meeting, a description of any matter on
which Holders are entitled to vote and instructions for the delivery of proxies
or written consents.
(c) Any action that may be taken at a meeting of the Limited
Partners may be taken without a meeting if a consent in writing setting forth
the action so taken is signed by Limited Partners owning not less than the
minimum Interests that would be necessary to authorize or take such action at a
meeting in which all Limited Partners having a right to vote thereon were
present and voting. Prompt notice of the taking of action without a meeting
shall be given to the Limited Partners entitled to vote who have not consented
in writing. The General Partner may provide that any written ballot submitted to
the Limited Partners for the purpose of taking any action without a meeting
shall be returned to the Partnership within a specified time.
58
(d) Each Partner may authorize any Person to act for it by proxy on
all matters as to which a Partner is entitled to participate, including waiving
notice of any meeting, or voting or participating at a meeting. Every proxy must
be signed by the Partner or its attorney-in-fact. No proxy shall be valid after
the expiration of 11 months from the date thereof unless otherwise provided in
the proxy. Every proxy shall be revocable at the pleasure of the Partner
executing it. Except as otherwise provided herein, or pursuant to Section
14.3(f), all matters relating to the giving, voting or validity of proxies shall
be governed by the General Corporation Law of the State of Delaware relating to
proxies, and judicial interpretations thereunder, as if the Partnership were a
Delaware corporation and the Limited Partners were stockholders of a Delaware
corporation.
(e) Each meeting of Partners shall be conducted by the General
Partner or by such other Person that the General Partner may designate.
(f) The General Partner may establish all other reasonable
procedures relating to meetings of Limited Partners or the giving of written
consents, in addition to those expressly provided, including notice of time,
place or purpose of any meeting at which any matter is to be voted on by any
Partners, waiver of any such notice, action by consent without a meeting, the
establishment of a record date, quorum requirements, voting in person or by
proxy or any other matter with respect to the exercise of any such right to
vote.
ARTICLE XV
MISCELLANEOUS
Section 15.1 NOTICES. All notices provided for in this Agreement
shall be in writing, and shall be delivered or mailed by first class or
registered or certified mail or, with respect to the Partnership and General
Partner, telecopied, as follows:
(a) if given to the Partnership, in care of the General Partner at
the Partnership's mailing address set forth below:
59
AT&T Capital Corporation
00 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Treasurer
(b) if given to the General Partner, at its mailing address set
forth below:
AT&T Capital Corporation
00 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Treasurer
(c) if given to any other Partner at the address set forth on the
books and records of the Partnership.
Section 15.2 POWER OF ATTORNEY. Each Holder of a Partnership
Preferred Security does hereby constitute and appoint the General Partner, and
if applicable, any Special Representative appointed pursuant to Section
6.2(h)(i) of this Agreement, as its true and lawful representative and
attorney-in-fact, in its name, place and stead to make, execute, sign, deliver
and file (a) any amendment of the Certificate required because of an amendment
of this Agreement or in order to effect any change in the Partnership, (b) this
Agreement, (c) any amendments to this Agreement and (d) all such other
instruments, documents and certificates which from time to time may be required
by the laws of the United States of America, the State of Delaware or any other
jurisdiction, or any political subdivision or agency thereof, to effectuate,
implement and continue the valid and subsisting existence of the Partnership or
to dissolve the Partnership for any other purpose consistent with this Agreement
and the transactions contemplated hereby.
The power of attorney granted hereby is coupled with an interest and
shall (a) survive and not be affected by the subsequent death, incapacity,
disability, dissolution, termination, or bankruptcy of the Holder granting the
same or the transfer of all or any portion of such Holder's Interest and (b)
extend to such Holder's successors, assigns and legal representatives.
Section 15.3 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties. It
60
supersedes any prior agreement or understandings among them, and it may not be
modified or amended in any manner other than as set forth herein.
Section 15.4 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE
LAW OF THE STATE OF DELAWARE AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY
SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
Section 15.5 EFFECT. Except as herein otherwise specifically
provided, this Agreement shall be binding upon and inure to the benefit of the
parties and their legal representatives, successors and assigns.
Section 15.6 PRONOUNS AND NUMBER. Wherever from the context it
appears appropriate, each term stated in either the singular or the plural shall
include the singular and the plural, and pronouns stated in either the
masculine, feminine or neuter shall include the masculine, feminine and neuter.
Section 15.7 CAPTIONS. Captions, headings, and subheadings contained
in this Agreement are included for convenience and identification purposes only
and in no way define, limit or extend the scope or intent of this Agreement or
any provision herein.
Section 15.8 PARTIAL ENFORCEABILITY. If any provision of this
Agreement, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Agreement, or the application of
such provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.
Section 15.9 COUNTERPARTS. This Agreement may contain more than one
counterpart of the signature page and this Agreement may be executed by the
affixing of the signature of each of the Partners to one of such counterpart
signature pages. All of such counterpart signature pages shall be read as though
one, and they shall have the same force and effect as though all of the signers
had signed a single signature page.
61
Section 15.10 WAIVER OF PARTITION. Each Partner hereby irrevocably
waives any and all rights (if any) that such Partner may have to maintain any
action for partition of any of the Partnership's property.
Section 15.11 REMEDIES. The failure of any party to seek redress for
violation of, or to insist upon the strict performance of, any provision of this
Agreement shall not prevent a subsequent act, which would have originally
constituted a violation, from having the effect of an original violation. The
rights and remedies provided by this Agreement are cumulative and the use of any
one right or remedy by any party shall not preclude or waive its right to use
any or all other remedies. Said rights and remedies are given in addition to any
other rights the parties may have by law, statute, ordinance or otherwise.
62
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above stated.
GENERAL PARTNER:
AT&T CAPITAL CORPORATION
a Delaware corporation
By: _____________________________________
Name:
Title:
INITIAL LIMITED PARTNER:
XXXXXXX X. XXXX, an individual
By: _____________________________________
Name:
Title:
63
ANNEX A
FORM OF PARTNERSHIP PREFERRED SECURITY CERTIFICATE
[IF THE PARTNERSHIP PREFERRED SECURITY IS TO BE A GLOBAL
CERTIFICATE INSERT: This Partnership Preferred Security is a Global Certificate
within the meaning of the Partnership Agreement hereinafter referred to and is
registered in the name of The Depository Trust Company (the "Depositary") or a
nominee of the Depositary. This Partnership Preferred Security is exchangeable
for Partnership Preferred Securities registered in the name of a person other
than the Depositary or its nominee only in the limited circumstances described
in the Partnership Agreement and no transfer of this Partnership Preferred
Security (other than a transfer of this Partnership Preferred Security as a
whole by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may be
registered except in limited circumstances.
Unless this Partnership Preferred Security is presented by an
authorized representative of The Depository Partnership Company (55 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx) to the Partnership or its agent for registration of
transfer, exchange or payment, and any Partnership Preferred Security issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of the Depositary and any payment hereon is made to
Cede & Co. or such other name as requested by or authorized representations of
the Depositary, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY A PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.]
Certificate Number Number of Partnership Preferred Securities
CUSIP NO. [ ]
Certificate Evidencing Partnership Preferred Securities
of
CAPITA PREFERRED FUNDING L.P.
____% Partnership Preferred Securities
(liquidation amount $25 per Partnership Preferred Security)
CAPITA PREFERRED FUNDING L.P., a limited partnership formed under
the laws of the State of Delaware (the "Partnership"), hereby certifies that
______________ (the "Holder") is the registered owner of preferred securities of
the Partnership representing limited partnership interests in the assets of the
Partnership designated the _____% Partnership Preferred Securities (liquidation
amount $25 per Partnership Preferred Security) (the "Partnership Preferred
Securities"). The Partnership Preferred Securities are transferable on the books
and records of the Partnership, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Partnership Preferred Securities represented hereby are issued
and shall in all respects be subject to the provisions of the Amended and
Restated Agreement of Limited Partnership dated as of October _, 1996, as the
same may be amended from time to time (the "Partnership Agreement"). Capitalized
terms used herein but not defined shall have the meaning given them in the
Partnership Agreement. The Holder is entitled to the benefits of the Partnership
Guarantee Agreement, dated October ___, 1996 by the Company (the "Partnership
Guarantee Agreement") to the extent provided therein. The Sponsor will provide a
copy of the Partnership Agreement, and the Partnership Guarantee Agreement to a
Holder without charge upon written request to the Partnership at its principal
place of business.
Upon receipt of this certificate, the Holder is bound by the
Partnership Agreement and is entitled to the benefits thereunder.
2
IN WITNESS WHEREOF, the Partnership has executed this certificate
this ___ day of __, 199_.
CAPITA PREFERRED FUNDING L.P.
By: AT&T CAPITAL CORPORATION
as General Partner
By:__________________________
Name:
3
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Partnership Preferred Security will
be fixed at a rate per annum of ______% of the stated liquidation amount of $25
per Partnership Preferred Security. Distributions not paid on the scheduled
payment date will accumulate and compound quarterly (to the extent permitted by
applicable law) at the rate of ____ % per annum. The term "Distributions" as
used herein shall mean ordinary cumulative distributions in respect of each
Fiscal Period together with any Compounded Distributions. Distributions on the
Partnership Preferred Securities will be made to the extent that the Partnership
has funds available for the payment of such distributions. Amounts available to
the Partnership for distribution to the holders of the Partnership Preferred
Securities will be limited to payments received by the Partnership from the
Company and certain wholly owned subsidiaries on the Initial Debentures and
Affiliate Investment Instruments or from the Company on the Partnership
Guarantee or on the Eligible Debt Securities. Distributions on the Partnership
Preferred Securities will be paid only if, as and when declared in the sole
discretion of the Company, as the General Partner of the Partnership. The amount
of Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 90-day quarter.
Except as otherwise described below, distributions on the
Partnership Preferred Securities will be cumulative, will accrue from the date
of initial issuance and will be payable quarterly in arrears, on March 31, June
30, September 30 and December 31 of each year, commencing on December 31, 1996
if, as and when declared by the General Partner. As long as the Partnership
Preferred Securities remain in book-entry-only form, Distributions will be
payable to the Holders of record of Partnership Preferred Securities as they
appear on the books and records of the Partnership on the relevant record dates,
which will be one Business Day prior to the relevant payment dates. If the Trust
or the Property Trustee is the Holder of the Partnership Preferred Securities,
all distributions of cash shall be made by wire transfer of same day funds to
such Holder by 10:00 a.m., New York City time, on the applicable Distribution
Payment Date. Distributions payable on any Partnership Preferred Securities that
are not punctually paid on any Dis-
4
tribution Payment Date will cease to be payable to the Person in whose name such
Partnership Preferred Securities are registered on the relevant record date, and
such Distribution will instead be payable to the Person in whose name such
Partnership Preferred Securities are registered on the special record date or
other specified date for payment of such defaulted or accrued Distribution. In
the event that the Partnership Preferred Securities do not remain in
book-entry-only form, the relevant record dates shall be the 15th day of the
month of the relevant payment dates. In the event that any date on which
distributions are payable is not a Business Day, payment of the Distribution
shall be made on the next succeeding day which is a Business Day (without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, with the same force and effect
as if made on such date. Payments of accrued Distributions will be payable to
Holders of record of Partnership Preferred Securities as they appear on the
books and records of the Partnership on the record date with respect to the
payment date for the Partnership Preferred Securities which corresponds to the
payment date with respect to the payment of cumulative distributions on the
Initial Debentures, Affiliate Investment Instruments and Eligible Debt
Securities. If distributions are not paid on the Initial Debentures, Affiliate
Investment Instruments and Eligible Debt Securities on any regularly scheduled
payment date, the Partnership will not pay Distributions on the Partnership
Preferred Securities until the Partnership has sufficient funds available for
such Distributions. If the Distributions are not paid on the Partnership
Preferred Securities, such unpaid Distributions will accumulate and will bear
interest compounded quarterly at the rate set out above.
The Partnership Preferred Securities shall be redeemable
as provided in the Partnership Agreement.
5
---------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Partnership
Preferred Security Certificate to:
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------
(Insert assignee's social security or tax identification number)
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
--------
(Insert address and zip code of assignee)
and irrevocably appoints
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------- agent to transfer this
Partnership Preferred Security Certificate on the books of the Partnership. The
agent may substitute another to act for him or her.
Date:
-----------------------
Signature:
--------------------
(Sign exactly as your name appears on the other side of this Partnership
Preferred Security Certificate)
1
