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EXHIBIT 10.56
CONSENT AND AMENDMENT OF AMENDED AGREEMENT OF PARTNERSHIP FOR
HALCYON COMMUNICATIONS PARTNERS
THIS CONSENT AND AMENDMENT, dated as of January 31, 1996, is
made and entered into by and among the undersigned parties.
Halcyon Communications Partners, an Oklahoma general
partnership (the "Partnership"), was formed under the Oklahoma Uniform
Partnership Act pursuant to a Partnership Agreement dated as of October 31,
1989 (the "Original Agreement") between Halcyon Communications, Inc., an
Oklahoma corporation ("HCI"), and ECP Holdings, Inc., an Oklahoma corporation
("ECP"). The Original Agreement, as heretofore amended, is referred to herein
as the "Partnership Agreement").
The undersigned parties desire to (i) consent to the
assignment to Xxxxxx Communications Associates, L.L.C., a Colorado limited
liability company, ("FCA") by ECP of one-third of its partnership interest in
the Partnership, (ii) consent to the grant to FCA by ECP of an option to
acquire the entire balance of ECP's partnership interest in the Partnership and
any future exercise of such option and (iii) consent to the admission of FCA to
the Partnership as a partner. The undersigned parties also desire to amend the
Partnership Agreement in certain respects.
Therefore, for and in consideration of the premises and for
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged by each party, the parties hereto agree as follows:
1. Certain Consents; Section 754 Election.
(a) HCI and ECP, in their capacities as, and constituting
all of, the partners of the Partnership hereby (i) consent to (A) the sale to
FCA, pursuant to the Agreement of Purchase and Sale of Partnership Interest,
dated as of the date hereof, among the parties hereto (the "Purchase
Agreement"), of the Purchased Interest (as defined in the Purchase Agreement) of
ECP, (B) the grant to FCA by ECP of an option to acquire the entire balance of
ECP's partnership interest in the Partnership pursuant to the Option Agreements
substantially in the form of Exhibit B to the Purchase Agreement (the "Option
Agreement"), (C) the admission of FCA, as the holder of the Purchased Interest
of ECP, to the Partnership as a partner effective as of the date hereof and (D)
any future exercise by FCA (or any of its permitted assignees) of its option and
rights under the Option Agreement pursuant to the terms thereof and, upon such
exercise, the transfer of the partnership interest and consummation of the other
transactions contemplated thereby (including, without limitation, the withdrawal
contemplated by the last sentence of paragraph 3(c) of the Option Agreement);
and (ii) agrees that the Partnership shall file, in a timely manner for the tax
year of the Partnership in which the sale referred to in subclause (i)(A) of
this sentence occurs, an election, pursuant to Section 754 of the Internal
Revenue Code of 1986, as amended (the "Code") and applicable Treasury
Regulations, to have the Partnership's assets adjusted as
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provided in Section 743 of the Code, and if requested by FCA (or any of its
permitted assignees) upon any purchase of any additional partnership interest
in the Partnership in connection with the exercise of its option under the
Option Agreement, also shall make such election in a timely manner for the tax
year of the Partnership in which such exercise occurs. FCA hereby agrees to be
admitted to the Partnership as a Partner and, as such, to be bound by the
provisions of the Partnership Agreement, as amended hereby.
(b) Without in any way limiting the generality of the
intentions of the terms "Partnership Interest" and "Purchased Interest" in the
Purchase Agreement or the definition of "Option Interest" in the Option
Agreement, the parties acknowledge, confirm and agree that (i) for purposes of
Paragraphs 6.8 and 7.2 of the Partnership Agreement and any other provision of
the Partnership Agreement pursuant to which the rights of a partner of the
Partnership are based upon or determined by reference to such partner's initial
or additional Capital Contributions (as defined in the Partnership Agreement)
as of any time of determination, FCA shall be deemed to have made (in addition
to any Capital Contributions actually made by it) a pro rata portion of all
Capital Contributions made by ECP on or prior to the date hereof, with such
portion being equal to the aggregate percentage of the Partnership Interest of
ECP which FCA shall have acquired, at or before such time, pursuant to the
Purchase Agreement or the Option Agreement; and (ii) as of the date hereof,
automatically by virtue of the sale of the Purchased Interest to FCA, all
rights of ECP under or by virtue of the Management Agreement, dated as of
October 31, 1989, among the Partnership, ECP and HCI, as "Manager," as
heretofore amended (the "Management Agreement") shall be rights of each of ECP
and FCA; provided, however, that in the event of the removal of Manager
pursuant to Section 5.2 by the mutual consent of ECP and FCA, ECP shall serve
as manager of the Partnership unless ECP and FCA agree to select a new manager.
The parties further acknowledge, confirm and agree that, notwithstanding any
provision of the Purchase Agreement, the Option Agreement or this instrument
apparently to the contrary, ECP shall have no obligation, liability or
responsibility for any obligations of ECP pursuant to Paragraph 7.2 of the
Partnership Agreement.
2. Amendments to Restated Partnership Agreement. The
undersigned parties hereby agree that, effective as of the date hereof, the
Restated Partnership Agreement is hereby amended as follows:
(a) Paragraph 5.1 of the Partnership Agreement is amended
to read in its entirety as follows:
"5.1 'Affiliate,' when used with respect to a
specified Person, shall mean any other Person that
directly, indirectly or through one or more
intermediaries Controls, is Controlled by or is under
Common Control with such Person. For purposes of the
foregoing, 'Control,' as to any Person, means the
possession, directly or indirectly, of the power to
direct or cause the direction of the management and
policies of such Person (whether through ownership of
securities, partnership interests or
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other ownership interests, by contract, by
partnership or involvement in the board of directors,
management committee or other management structure of
such Person, or otherwise). The terms 'Controlled,'
'Controlling' and similar variations shall have
correlative meanings."
(b) The defined term "Partner" set forth in Paragraph
5.14 of the Partnership Agreement is amended to read in its entirety as
follows:
"5.14 'Partner' shall mean each of ECP
Holdings, Inc., an Oklahoma corporation, Halcyon
Communications, Inc., an Oklahoma corporation, Xxxxxx
Communications, L.L.C, a Colorado limited liability
company, and each other Person, if any, who is
admitted as a successor or additional partner of the
Partnership in accordance with this Agreement, in
each case unless and until such Person ceases to be a
limited partner of the Partnership in accordance with
this Agreement."
(c) Article V of the Partnership Agreement is further
amended by adding thereto, immediately after Paragraph 5.3 thereof, a new
Paragraph 5.3(a) which shall read in its entirety as follows:
"5.3(a) 'FCA' shall mean Xxxxxx
Communications Associates, L.L.C., a Colorado limited
liability company."
(d) Article V of the Partnership Agreement is further
amended by adding thereto, immediately after Paragraph 5.19 thereof, a new
Paragraph 5.19(a) which shall read in its entirety as follows:
"5.19(a) 'Person' shall mean any individual,
firm, corporation or other legal entity."
(e) The first sentence of Paragraph 8.7 of the
Partnership Agreement is amended to read in its entirety as follows:
"All distributions of Excess Cash Flow shall be
distributed seventy-five percent (75%) to ECP and FCA
(in proportion to their respective Capital Accounts)
and twenty-five percent (25%) to Halcyon."
(f) Paragraph 9.1 of the Partnership Agreement is amended
to read in its entirety as follows:
"9.1 Allocations of Profits. For bookkeeping
and income tax purposes, in the event of the sale of
all or substantially all of the Partnership Assets or
upon dissolution of the Partnership:
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"(a) Profit shall be allocated first to ECP
and FCA (in proportion to their respective Capital
Accounts) until such time as each has been allocated
Profits under this Paragraph 9.1(a) equal to the
amount of interest earned on its Capital
Contributions pursuant to Paragraphs 6.8 and 7.2;
"(b) Profit shall then be allocated to ECP
and FCA (in proportion to their respective Capital
Accounts) until such time as each has received the
excess, if any, of the Losses allocated previously to
such Partner under Article VIII over all Profits
allocated under Article VIII or this Paragraph
9.1(b);
"(c) Profit shall next be allocated to
Halcyon until such time as it has received the
excess, if any, of the Losses allocated previously to
Halcyon under Article VIII over all Profits allocated
under Article VIII or this Paragraph 9.1(c); and
"(d) Any remaining Profit or Loss shall be
allocated seventy-five percent (75%) to ECP and FCA
(in proportion to their respective Capital Accounts)
and twenty-five percent (25%) to Halcyon."
(g) Article IX of the Partnership Agreement is further
amended by deleting therefrom Paragraph 9.2 in its entirety.
(h) Article XV of the Partnership Agreement is amended to
read in its entirety as follows:
"ARTICLE XV
"Assignability of Partnership Interests; Admission of
Additional Partners.
"No Partner shall mortgage, pledge, hypothecate,
transfer, sell, assign or otherwise dispose of all or any part
of its interest in the Partnership, whether voluntarily, by
operation of law or otherwise, or any right, title or interest
in or to such interest without obtaining the prior written
consent of the other Partners, except as provided for in this
Agreement. Notwithstanding the foregoing, ECP or FCA shall
have the right, in its sole discretion, to transfer all or any
part of its interest in the Partnership to (i)
Tele-Communications, Inc., a Delaware corporation, or any
Affiliate thereof or (ii) FCA or any FCA Permitted Transferee
(as hereinafter defined). For purposes of this Agreement, the
term 'FCA Permitted Transferee' shall mean (i) any Affiliate
of Donne
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X. Xxxxxx, currently a resident of Littleton, Colorado
('Xxxxxx'), (ii) any member of Xxxxxx'x immediate family
(i.e., wife, parents, children, including those adopted before
the age of 18, grandchildren, brothers, sisters, and the
spouses or children of the foregoing), (iii) any custodian
under the Uniform Gifts to Minors Act or similar fiduciary for
the exclusive benefit of Xxxxxx'x children during their lives,
(iv) in the event of Xxxxxx'x adjudication of incompetency,
his legal representatives, (v) in the event of Xxxxxx'x death,
his executors or the administrators of his estate and his
heirs who are members of his immediate family, and (v) any
trust described in Section 664 of the I.R.C. of which Xxxxxx
or one or more members of his immediate family (and no other
persons) are income beneficiaries. In the event of a permitted
transfer of any interest in the Partnership, the transferee
(other than, with respect to clauses (i) of this sentence
below, a transferee who was already a partner prior to the
permitted transfer) shall, by written instrument in form and
substance reasonably satisfactory to the non-transferring
Partners (i) agree to become a Partner and accept and adopt
the terms and provisions of this Agreement and (ii) assume the
obligations of the transferor Partner under this Agreement
with respect to the transferred partnership interest. If
required by the nontransferring Partners, the transferee shall
deliver to the Partnership an opinion, reasonably satisfactory
in form and substance to the nontransferring Partners, of
counsel reasonably satisfactory to the nontransferring
Partners to the effect that the transfer is in compliance with
applicable state and Federal securities laws. Upon completion
of any permitted transfer in accordance with the foregoing,
the transferee (if not already a Partner) shall be admitted as
a substituted Partner in the place and stead of the transferor
Partner with respect to the transferred partnership interest,
without any further action, and if such transfer is of the
entire partnership interest of the transferor Partner, such
transferor Partners shall be deemed to have withdrawn from the
Partnership without further action. Except for the transferee
of a partnership interest permitted by and in accordance with
this Article XV, no Person shall be admitted as a general or
limited partner of the Partnership without the prior written
consent of all the Partners."
(i) Paragraph 18.1 of the Partnership Agreement is
amended by (i) redesignating clause (iii) thereof as clause (iv) and (ii)
adding, immediately after clause (ii) thereof a new clause (iii) which shall
read in its entirety as follows:
"(iii) the sale of all or substantially all of the
Partnership Assets; or"
(j) Paragraph 19.2 of the Partnership Agreement is
amended to read in its entirety as follows:
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"19.2 Designation of Purchaser. Each of ECP and FCA
shall have the right to designate another entity to
exercise its purchase rights under this Agreement as
long as the designated entity is (i) ECP or an
Affiliate of ECP or (ii) FCA or an FCA Permitted
Transferee."
(k) Paragraph 19.3 of the Partnership Agreement is
amended by adding thereto, immediately before the words "in the case of ECP"
appearing therein, the following:
"in the case of FCA, at 0000 Xxxxxx Xxxxx,
Xxxxxxxxx, XX 00000."
3. Reaffirmation. The undersigned parties hereby
acknowledge that the Partnership Agreement, as amended hereby, remains in full
force and effect and is hereby ratified and confirmed.
IN WITNESS WHEREOF, the undersigned parties have duly executed
and delivered this Consent and Amendment as of the date first above written.
HALCYON COMMUNICATIONS EPC HOLDINGS INC.
By: /s/ XXXXXX X. XXXXX By: /s/ XXXXX XXXXX
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Name: XXXXXX X. XXXXX Name: XXXXX XXXXX
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Title: PRESIDENT Title: EVP
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XXXXXX COMMUNICATIONS
ASSOCIATES, L.L.C.
By: /s/ XXXXX X. XXXXXX 2-12-96
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Xxxxx X. Xxxxxx, Member
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