AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
THIS AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
(“Agreement”) of Kiewit Investment Fund LLLP
(the “Partnership”), effective as of
July 22, 2005, is entered into by and among Kiewit
Investment Holdings Inc., a Delaware corporation (the
“General Partner”), and Kiewit Finance Group
Inc., a Delaware corporation (the “Initial Limited
Partner”), together with any other Persons who become
Partners in the Partnership as provided herein.
PRELIMINARY STATEMENT. The Partnership was formed on
September 8, 2004 upon the filing of the Certificate of
Limited Partnership with the Secretary of State pursuant to an
oral agreement between the General Partner and the Initial
Limited Partner. The General Partner and the Initial Limited
Partner thereafter entered into, and the Partnership has been
governed by and operated pursuant to the terms and provisions
of, a Limited Partnership Agreement dated as of October 5,
2004 (the “Original Partnership Agreement”).
The Partnership registered as a limited liability limited
partnership with the Secretary of State on May 13, 2005.
The Partnership amended its Certificate of Limited Partnership
on May 13, 2005 with respect to changing the
Partnership’s name from “Kiewit Investment Fund
L.P.” to “Kiewit Investment Fund LLLP.” As
specified in Section 7(a) of the Original
Partnership Agreement, the General Partner irrevocably delegated
its authority to manage the business and affairs of the
Partnership to the Board, pursuant to Section 17-403 of the
Delaware Act. The General Partner and the Initial Limited
Partner now desire to amend and restate the Original Partnership
Agreement in its entirety to make certain modifications thereto
as provided herein.
NOW, THEREFORE, in consideration of the foregoing premises and
the covenants, conditions and agreements contained herein, the
parties hereto hereby amend and restate the Original Partnership
Agreement, and agree to continue the Partnership under the
Delaware Act as a registered limited liability limited
partnership under the Delaware Act and the Delaware Revised
Uniform Partnership Act, 6 Del. C. Sec. 15-101, et seq., as
follows:
ARTICLE I.
DEFINITIONS
Section 1.1. Definitions.
The following definitions shall be for all purposes, unless
otherwise clearly indicated to the contrary, applied to the
terms used in this Agreement.
“1940 Act” means the Investment Company Act of
1940.
“1940 Act Majority of Limited Partners” means
the lesser of (a) the holders of 67% or more of the
outstanding Units present at a meeting of Limited Partners at
which the holders of more than 50% of the outstanding Units are
present in person or by proxy or (b) more than 50% of the
outstanding Units.
“Adjusted Capital Account Deficit” means, with
respect to any Partner, the deficit balance, if any, in such
Partner’s Capital Account as of the end of the relevant
Fiscal Period, after giving effect to the following adjustments:
| (a) Credit to such Capital Account any amounts which such Partner is obligated to restore or is deemed to be obligated to restore pursuant to Treasury Regulations under Section 704 of the Code; and | |
| (b) Debit to such Capital Account the items described in Treasury Regulations Sections 1.704-l(b)(2)(ii)(d)(4), (5) and (6). |
The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Treasury Regulations
Section 1.704-l(b)(2)(ii)(d) and shall be interpreted
consistently therewith.
“Advance Notice” has the meaning set forth in
Section 8.1(b) hereof.
“Adviser” means any Person or Persons selected
from time to time to provide investment advisory or investment
management services to the Partnership pursuant to an Investment
Advisory Agreement with the
Partnership or, if the Board has granted an Adviser the
authority to do so, any Person that is a party to an Investment
Advisory Agreement with an Adviser to manage a portion of the
Partnership’s assets.
“Affiliate” means, with respect to any Person,
an affiliated person as that term is defined in the 1940 Act.
“Agreement” means this Amended and Restated
Limited Partnership Agreement of the Partnership, as it may be
amended, supplemented or restated from time to time.
“Applicable Rate” means a rate per annum equal,
at the time of determination, to the sum of (a) the highest
“prime rate” then published in the “Money
Rates” section of The Wall Street Journal or in such
successor publication as shall be acceptable to the Board and
(b) two percent (2%).
“Board” means the body of those natural persons
who at any given time are serving as Directors of the
Partnership in accordance with this Agreement.
“Book Depreciation” means, for each Fiscal
Period in respect of a particular asset of the Partnership, an
amount equal to the depreciation, amortization, or other cost
recovery deduction allowable for United States federal income
tax purposes with respect to such asset for such Fiscal Period,
except that if, as of the beginning of the Fiscal Period, the
Book Value of such asset differs from its adjusted basis for
United States federal income tax purposes, Book Depreciation for
such asset shall be an amount which bears the same ratio to such
beginning Book Value as the United States federal income tax
depreciation, amortization or other cost recovery deduction with
respect thereto for such Fiscal Period bears to such beginning
adjusted tax basis; provided, that if, under such circumstances,
the asset’s adjusted basis for United States federal income
tax purposes at the beginning of a Fiscal Period is zero, the
Book Depreciation for such asset shall be determined with
reference to its Book Value using any method selected by the
Board.
“Book Value” means, with respect to an asset of
the Partnership, the adjusted basis for United States federal
income tax purposes of the Partnership in such asset, except as
follows:
| (a) The initial Book Value of any asset contributed by any Partner to the capital of the Partnership shall be the fair market value of such asset on the date of its contribution to the Partnership as determined by the Board or as otherwise provided in, or contemplated by, this Agreement; | |
| (b) The Book Values of all of the assets of the Partnership shall be adjusted to equal their respective fair market values, as determined by the Board, as of the following times: (i) the acquisition of an additional equity interest in the Partnership by any new or existing Partner in exchange for more than a de minimis Capital Contribution; (ii) the distribution by the Partnership to a Partner of more than a de minimis amount of property (including money, but excluding any promissory note of the Partnership) as consideration for all or part of such Partner’s Units; (iii) the grant of more than a de minimis equity interest in the Partnership in consideration for services rendered to or for the benefit of the Partnership by an Partner acting in a “partner capacity” within the meaning of Treasury Regulations Section 1.704-1(b)(2)(iv)(f)(5)(iii), or by a new Partner acting in such a partner capacity or in anticipation of becoming a Partner and having such a partner capacity; and (iv) the liquidation of the Partnership within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g); provided, however, that adjustments pursuant to clauses (i), (ii), and (iii) above shall be made only if the Board determines that such adjustments are necessary or appropriate to reflect the Partners’ respective economic interests in the Partnership; | |
| (c) The Book Value of any asset of the Partnership (excluding money, but including any promissory note of the Partnership) distributed to any Partner shall be adjusted to equal the fair market value of such asset on the date of the distribution as determined by the Board or as otherwise provided in, or contemplated by, this Agreement; and | |
| (d) The Book Values of certain assets of the Partnership shall be increased, or decreased, as the case may be, to reflect any adjustments to the adjusted United States federal income tax basis of such assets pursuant to Section 734(b) of the Code or Section 743(b) of the Code, but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) (and Subparagraph (f) of the definition of “Net Profit” and |
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| “Net Loss” or Section 6.2(e)); provided, that Book Values of assets of the Partnership shall not be adjusted pursuant to this Subparagraph (d) to the extent that an adjustment under Subparagraph (b) above is made in connection with the transaction that would otherwise result in an adjustment pursuant to this Subparagraph (d). |
If the Book Value of an asset of the Partnership has been
determined or adjusted pursuant to Subparagraph (a), (b) or
(d) above, such Book Value shall thereafter be adjusted by
the Book Depreciation taken into account with respect to such
asset for purposes of computing Net Profit and Net Loss (or
items, if any of income, gain, loss, deduction or expense of the
Partnership to be allocated hereunder that are not included in
the computation of Net Profit and Net Loss).
“Business Day” means any day other than a
Saturday, a Sunday or a day on which banking institutions in
Omaha, Nebraska, are authorized or obligated by law, executive
order or governmental decree to be closed.
“By-Laws” shall mean the By-Laws of the
Partnership, as amended and restated from time to time.
“Canadian Representative” shall have the
meaning set forth in Section 9.7(a).
“Capital Account” means, with respect to each
Partner, the capital account established and maintained for the
Partner pursuant to Section 6.1 of this Agreement.
“Capital Contribution” means, with respect to
any Partner, the amount of money and fair market value of other
property (net of any liabilities assumed by the Partnership or
to which such other property is subject) contributed by or on
behalf of such Partner to the capital of the Partnership
pursuant to this Agreement. The value of any non-cash Capital
Contribution shall be determined by the Board.
“Certificate of Limited Partnership” means the
Certificate of Limited Partnership of the Partnership filed with
the Secretary of State by the General Partner, as such
Certificate of Limited Partnership may be amended, supplemented
or restated from time to time.
“Closing” means the closing of the Initial
Offering.
“Closing Date” means the date on which the
Closing occurs.
“Code” means the Internal Revenue Code of 1986.
“Designee” shall have the meaning set forth in
Section 12.2.
“Delaware Act” means the Delaware Revised
Uniform Limited Partnership Act, 6 Del. C.
Sec. 17-101, et. seq.
“Disinterested Directors” shall have the
meaning set forth in Section 10.2(b).
“Director” or “Directors”
means each Person who may, from time to time, be duly elected or
appointed, qualified and serving on the Board in accordance with
the provisions hereof. Reference herein to a Director or the
Director shall refer to such Person or Persons in their capacity
as directors hereunder.
“Eligible Purchaser” means, as of the date of
determination, and except as otherwise determined by the Board,
(a) any Employee who is also a Kiewit Stockholder,
(b) any Former Employee who was also previously a Kiewit
Stockholder, (c) any Limited Partner, (d) Kiewit (or
any entity controlled by Kiewit) (e) the General Partner,
(f) any Director and (g) any other Person specified by
the Board who is eligible to own securities of the Partnership.
“Employees’ Securities Company” shall have
the meaning set forth in Section 2(a)(13) of the 1940 Act
as such provision may be amended, supplemented or restated from
time to time.
“Employee” means, as of any date, a natural
person who is an employee or Director of Kiewit or an employee
of a Kiewit Related Entity.
“Exemptive Order” means any order of the SEC
pursuant to Section 6(b) of the 1940 Act relating to the
Partnership’s manner of operation as an Employees’
Securities Company; provided that, if on the date of the
Closing, an Exemptive Order as just defined has not been issued
by the SEC, until such time as such an
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Exemptive Order is issued, the term “Exemptive Order”
shall mean the application under Section 6(b) of the 1940
Act filed with the SEC.
“Fiscal Period” means (a) any period for
which the Partnership is required to allocate Net Profit, Net
Loss, or other items of Partnership income, gain, loss,
deduction or expense pursuant to this Agreement or (b) any
other period determined by the Board.
“Fiscal Quarter” means each three-month period
ending on March 31, June 30, September 30 and
December 31; provided that the first Fiscal Quarter shall
commence on the Closing Date.
“Fiscal Year” means each annual period ending
on March 31 or such other date as determined by the Board.
“Former Employee” means, as of the Closing
Date, a natural person who was previously an Employee.
“General Partner” means Kiewit Investment
Holdings Inc., a Delaware corporation, and any successor Person
properly serving as general partner of the Partnership.
“Incapacity” means, as to any Person, the entry
of an order for relief in a bankruptcy proceeding, entry of an
order of incompetence or insanity or the death, dissolution or
termination (other than by merger or consolidation), as the case
may be, of such Person.
“Indemnified Liabilities” shall have the
meaning specified in Section 10.2(a).
“Indemnified Person” shall have the meaning
specified in Section 10.2(a).
“Initial Limited Partner” means Kiewit Finance
Group Inc., a Delaware corporation.
“Initial Offering” means the initial public
offering of Units.
“Interest” means the interest of a Partner in
the Partnership at any particular time, including rights to
which a Partner may be entitled to, and obligations of a Partner
to comply with, in each case, under this Agreement.
“Investment Advisory Agreement” means any
agreement between or among the Partnership and any Adviser, or
between Advisers, that provides for the provision of investment
advisory or investment management services by such Adviser to
the Partnership and the payment therefor by the Partnership as
in effect from time to time.
“Kiewit” means Xxxxx Xxxxxx Sons’, Inc., a
Delaware corporation.
“Kiewit Related Entity” means any corporation,
limited liability company, partnership, unlimited liability
company, joint venture, or any other entity as to which such
entity and Kiewit are Affiliates of each other.
“Kiewit Stock” means the $0.01 par value common
stock of Kiewit.
“Kiewit Stockholder” means a holder of record
of Kiewit Stock.
“Limited Partner” means, (a) prior to the
Closing, the Initial Limited Partner and (b) thereafter,
each Person named as a limited partner of the Partnership in the
books and records of the Partnership who has not ceased to be a
Limited Partner under the terms of this Agreement.
“Majority in Interest of the Limited Partners”
means Limited Partners who in the aggregate own more than 50% of
the outstanding Units.
“Net Asset Value” means the value of the
Partnership’s total assets less total liabilities,
determined pursuant to such policies and procedures adopted by
the Board.
“Net Profit” and “Net Loss”
mean, for each Fiscal Period, an amount equal to the
Partnership’s taxable income or loss for such Fiscal
Period, determined in accordance with Section 703(a) of the
Code (for this purpose, all items of income, gain, loss,
deduction or expense required to be stated separately pursuant to
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Section 703(a)(1) of the Code shall be included in taxable
income or loss), with the following adjustments (without
duplication):
| (a) Any income of the Partnership that is exempt from United States federal income tax and not otherwise taken into account in computing Net Profit or Net Loss, shall be added to such taxable income or loss; | |
| (b) Any expenditures of the Partnership described in Section 705(a)(2)(B) of the Code, or treated as expenditures pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Net Profit or Net Loss, shall be subtracted from such taxable income or loss; | |
| (c) In the event the Book Value of any asset of the Partnership is adjusted pursuant to Subparagraph (b) or Subparagraph (c) of the definition of “Book Value,” the amount of such adjustment shall be taken into account as gain or loss, as the case may be, from the disposition of such asset for purposes of computing Net Profit or Net Loss; | |
| (d) Gain or loss resulting from any disposition of assets of the Partnership with respect to which gain or loss is recognized for United States federal income tax purposes shall be computed by reference to the Book Value of the disposed asset, notwithstanding that the adjusted tax basis of such asset differs from its Book Value; | |
| (e) In lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Book Depreciation for such Fiscal Period; | |
| (f) To the extent an adjustment to the adjusted tax basis of any of the assets of the Partnership pursuant to Section 734(b) of the Code or Section 743(b) of the Code is required pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Account balances as a result of a distribution other than in liquidation of a Partner’s Interest in the Partnership, the amount of such adjustment shall be treated as gain or loss, as the case may be, from the disposition of such asset and shall be taken into account for purposes of computing Net Profit or Net Loss; and | |
| (g) Notwithstanding Subparagraphs (a) through (f) above, any items of income, gain, loss, deduction, or expense which are specially allocated under this Agreement, including pursuant to Section 6.2(c), shall not be taken into account in computing Net Profit or Net Loss, but the amounts of such items (except with respect to allocations made under Section 6.3) shall be determined by applying rules comparable to those set forth in Subparagraphs (a) through (f) above. | |
“1940 Act” means the Investment Company Act of
1940, as amended from time to time.
“Nonrecourse Deductions” shall have the meaning
set forth in Treasury Regulations Section 1.704-2.
“Officer” or “Officers” means
the officers of the Partnership appointed in accordance with
Section 5.17 and the By-Laws.
“Original Partnership Agreement” shall have the
meaning set forth in the Preliminary Statement.
“Partner Nonrecourse Debt” shall have the
meaning set forth in Treasury Regulations Section 1.704-2.
“Partner Nonrecourse Debt Minimum Gain” shall
have the meaning set forth in Treasury Regulations
Section 1.704-2.
“Partner Nonrecourse Deductions” shall have the
meaning set forth in Treasury Regulations Section 1.704-2.
“Partner” or “Partners” means
one or more of the General Partner and the Limited Partners, as
applicable.
“Partnership” means Kiewit Investment Fund
LLLP, a Delaware limited liability limited partnership.
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“Partnership Expenses” means fees, charges,
taxes and liabilities incurred by or arising in connection with
the maintenance or operation of the Partnership, or in
connection with the management thereof, including: fees and
expenses of the Board; fees and expenses of Advisers;
administration fees, expenses of registering the Units for sale
under federal and state securities laws and other expenses in
connection with the offering of the Units; interest; taxes; fees
and expenses of the Partnership’s legal counsel and
independent accountants; fees and expenses of the
Partnership’s administrator, transfer agent and custodian;
expenses of printing and mailing, reports to Partners, notices
to Partners, proxy statements; reports to regulatory bodies;
brokerage and other expenses in connection with the execution,
recording and settlement of portfolio security transactions;
expenses in connection with the acquisition or disposition of
portfolio securities or the registration of privately issued
portfolio securities; costs of third party evaluations or
appraisals of the Partnership (or its assets) or its
investments; expenses of Partnership in investment company and
other trade associations; expenses of fidelity bonding and other
insurance premiums; expenses of Partners’ meetings;
indemnification costs and expenses, including advances under
Section 10.2; fees and expenses of counsel to the
Directors (if any); and all of the Partnership’s other
business and operating expenses.
“Partnership Minimum Gain” shall have the
meaning set forth in Treasury Regulations Section 1.704-2.
“Partnership Property” means any and all
property, real or personal, tangible or intangible, which is
owned or held for the account of the Partnership.
“Pass-Through Limited Partner” shall have the
meaning set forth in Section 9.7(b).
“Permitted Transfer” shall have the meaning
specified in Section 8.3(a).
“Person” means any natural person, individual,
corporation, limited liability company, partnership, joint
venture, trust, unincorporated organization, association,
government agency or political subdivision thereof or any other
entity.
“Record Date” means the date established by the
Board for determining (a) the identity of the Partners entitled
to notice of, or to vote at, any meeting of Partners or entitled
to vote by ballot or give approval of Partnership action in
writing without a meeting or entitled to exercise rights in
respect of any lawful action of Partners, or (b) the
identity of Partners entitled to receive any report or
distribution or to participate in any offer.
“Registration Statement” means the
Partnership’s most recent effective registration statement
on form N-2 under the Securities Act and the 1940 Act, as
amended or supplemented from time to time.
“Regulatory Allocations” shall have the meaning
set forth in Section 6.2(d).
“SEC” means the United States Securities and
Exchange Commission.
“Secretary of State” means the Secretary of
State of the State of Delaware.
“Securities Act” means the Securities Act of
1933, as amended from time to time.
“Substituted Limited Partner” means any Person
who is admitted to the Partnership as a Limited Partner pursuant
to the provisions of Section 8.3 in place of a
Limited Partner and who is shown as a Limited Partner on the
books and records of the Partnership.
“Supermajority of Limited Partners” means
Limited Partners who in the aggregate own more than 67% of the
outstanding Units.
“Tax Matters Partner” means the tax matters
partner of the Partnership within the meaning of
Section 9.7(a).
“Tax Withholding” shall have the meaning set
forth in Section 7.6.
“Transfer,” “Transferred,” or
“Transferring” means the direct or indirect,
voluntary or involuntary, transfer, assignment, sale, exchange,
pledge, hypothecation, encumbrance or other disposition
(including without limitation any right to receive any
distributions or allocations in respect of an Interest).
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“Transfer Agent” means such Person as shall be
appointed from time to time by the Board to act as registrar and
transfer agent for the Units.
“Treasury Regulations” means the income tax
regulations, including temporary regulations, promulgated under
the Code, as the same may be amended hereafter from time to time
(including corresponding provisions of succeeding income tax
regulations).
“Unit” means a fractional part of the Interest
of a Limited Partner designated as a Unit and having the rights
and obligations specified with respect to Units in this
Agreement, and includes fractions of Units as well as whole
Units.
“Withholding Advances” shall have the meaning
set forth in Section 7.6.
ARTICLE II.
GENERAL PROVISIONS
Section 2.1. Name. The
name of the Partnership is “Kiewit Investment Fund
LLLP.” The Partnership’s name may be changed from time
to time by the Board; provided that the words “Limited
Liability Limited Partnership,” “LLLP” or similar
words or letters shall be included in the Partnership’s
name. The Partnership’s business may be conducted under any
other name or names deemed necessary or appropriate by the Board.
Section 2.2. Registered
Office; Registered Agent; Principal Office; Other Offices.
Unless and until changed at the direction of the Board, the
registered office of the Partnership in the State of Delaware
shall be located at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000, and the registered agent for service of process on the
Partnership in the State of Delaware at such registered office
shall be The Corporation Trust Company. The principal office of
the Partnership shall be located at 00 Xxxxxxx Xxxxxx, 00xx
Xxxxx, Xxxxxx, XX 00000, c/o X.X. Xxxxxx Investor
Services Co., or such other place as the Board may from time to
time determine. The Partnership may maintain offices at such
other place or places within or outside the State of Delaware as
the Board deems necessary or appropriate.
Section 2.3. Term. The
Partnership shall continue in existence until the Partnership is
terminated and dissolved in accordance with the provisions of
Article XI hereof.
Section 2.4. Title to
Partnership Property. The Partnership Property shall be
owned by the Partnership. No Partner, individually or jointly,
shall have any ownership interest in Partnership Property.
Section 2.5. Status of
Interests. Interests shall be deemed to be personal property
giving only the rights provided in this instrument. The names of
all of the Partners and the amounts of their respective
Interests in the Partnership and Units held by them from time to
time shall be set forth in the books and records of the
Partnership. Every Partner by virtue of having become a Partner
shall be held to have expressly assented and agreed to the terms
of this Agreement and to have become a party to this Agreement.
ARTICLE III.
PARTNERSHIP PURPOSE
Section 3.1. Partnership
Purpose. The purpose of the Partnership is to conduct,
operate and carry on the business of an investment fund,
including an investment fund satisfying the requirements of an
Employees’ Securities Company, investing primarily in
securities and to exercise all of the powers and privileges
granted to a limited partnership formed under the laws of the
State of Delaware, now or hereafter in force, including the
following powers:
| (a) To invest and reinvest cash, to hold cash uninvested, and to subscribe for, invest in, reinvest in, purchase or otherwise acquire, own, hold, pledge, sell, assign, mortgage, transfer, exchange, distribute, write options on, lend or otherwise deal in or dispose of contracts for the future acquisition or delivery of fixed income or other securities, and securities or property of every nature and kind, including all types of |
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| bonds, debentures, stocks, preferred stocks, negotiable or non-negotiable instruments, obligations, evidences of indebtedness, certificates of deposit or indebtedness, commercial paper, repurchase agreements, bankers’ acceptances, and other securities of any kind, issued, created, guaranteed, or sponsored by any and all Persons, including states, territories, and possessions of the United States and the District of Columbia and any political subdivision, agency, or instrumentality thereof, any foreign government or any political subdivision of the U.S. Government or any foreign government, or any international instrumentality, or by any bank or savings institution, or by any corporation or organization organized under the laws of the United States or of any state, territory, or possession thereof, or by any corporation or organization organized under any foreign law, or “when issued” contracts for any such securities, or to change the investments of the assets of the Partnership; | |
| (b) To exercise any and all rights, powers and privileges with reference to or incident to ownership or interest, use and enjoyment of any of such securities and other instruments or property of every kind and description, including the right, power and privilege to own, vote, hold, purchase, sell, negotiate, assign, exchange, lend, transfer, mortgage, hypothecate, lease, pledge or write options with respect to or otherwise deal with, dispose of, use, exercise or enjoy any rights, title, interest, powers or privileges under or with reference to any of such securities and other instruments or property, the right to consent and otherwise act with respect thereto, with power to designate one or more Persons, to exercise any of said rights, powers, and privileges in respect of any of said instruments, and to do any and all acts and things for the preservation, protection, improvement and enhancement in value of any of such securities and other instruments or property; | |
| (c) To sell, exchange, lend, pledge, mortgage, hypothecate, lease or write options with respect to or otherwise deal in any property rights relating to any or all of the assets of the Partnership; | |
| (d) To vote or give assent, or exercise any rights of ownership, with respect to stock or other securities or property; and to execute and deliver proxies or powers of attorney to such Person or Persons as the Board shall deem proper, granting to such Person or Persons such power and discretion with relation to securities or property as the Board shall deem proper; | |
| (e) To exercise powers and right of subscription or otherwise which in any manner arise out of ownership of securities; | |
| (f) To hold any security or property in a form not indicating that it is limited partnership property, whether in bearer, unregistered or other negotiable form, or in its own name or in the name of a custodian or subcustodian or a nominee or nominees or otherwise or to authorize the custodian or a subcustodian or a nominee or nominees to deposit the same in a securities depository; | |
| (g) To consent to, or participate in, any plan for the reorganization, consolidation or merger of any corporation or issuer of any security which is held in the Partnership; to consent to any contract, lease, mortgage, purchase or sale of property by such corporation or issuer; and to pay calls or subscriptions with respect to any security held in the Partnership; | |
| (h) To join with other security holders in acting through a committee, depositary, voting trustee or otherwise, and in that connection to deposit any security with, or transfer any security to, any such committee, depositary or trustee, and to delegate to them such power and authority with relation to any security (whether or not so deposited or transferred) as the Board shall deem proper, and to agree to pay, and to pay, such portion of the expenses and compensation of such committee, depositary or trustee as the Board shall deem proper; | |
| (i) To compromise, arbitrate or otherwise adjust claims in favor of or against the Partnership or any matter in controversy, including claims for taxes; | |
| (j) To enter into joint ventures, general or limited partnerships and any other combinations or associations; | |
| (k) To endorse or guarantee the payment of any notes or other obligations of any Person; to make contracts of guaranty or suretyship, or otherwise assume liability for payment thereof; |
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| (l) To purchase and pay for entirely out of Partnership Property such insurance as the Board may deem necessary or appropriate for the conduct of the business, including insurance policies insuring the assets of the Partnership or payment of distributions and principal on its portfolio investments, and insurance policies insuring the Limited Partners, the General Partner, Directors, Officers, employees, agents, Advisers, distributors of Units (if any), or independent contractors of the Partnership, individually against all claims and liabilities of every nature arising by reason of holding Units, holding, being or having held any such office or position, or by reason of any action alleged to have been taken or omitted by any such Person as Limited Partner, General Partner, Director, Officer, employee, agent, Adviser, distributor of Units (if any), or independent contractor, to the fullest extent permitted by this Agreement and by applicable law; | |
| (m) To adopt, establish and carry out pension, profit-sharing, share bonus, share purchase, savings, thrift and other retirement, incentive and benefit plans, trusts and provisions, including the purchasing of life insurance and annuity contracts as a means of providing such retirement and other benefits, for any or all of the General Partner, Directors, Officers, employees and agents of the Partnership; | |
| (n) To purchase or otherwise acquire, own, hold, sell, negotiate, exchange, assign, transfer, mortgage, pledge or otherwise deal with, dispose of, use, exercise or enjoy, property of all kinds; | |
| (o) To buy, sell, mortgage, encumber, hold, own, exchange, rent or otherwise acquire and dispose of, and to develop, improve, manage, subdivide, and generally to deal and trade in real property, improved and unimproved, and wheresoever situated; and to build, erect, construct, alter and maintain buildings, structures, and other improvements on real property; | |
| (p) To borrow or raise moneys for any of the purposes of the Partnership, and to mortgage or pledge the whole or any part of the property and franchises of the Partnership, real, personal, and mixed, tangible or intangible, and wheresoever situated; | |
| (q) To enter into, make and perform contracts and undertakings of every kind for any lawful purpose, without limit as to amount; and | |
| (r) To issue, purchase, sell and transfer, reacquire, hold, trade and deal in Units, bonds, debentures and other securities, instruments or other property of the Partnership, from time to time, to such extent as the Board shall determine; and to repurchase and redeem, from time to time, its Units or, if any, its bonds, debentures and other securities. |
The Partnership shall not be limited to investing in obligations
maturing before the possible dissolution of the Partnership. The
Board shall not in any way be bound or limited by any present or
future law or custom in regard to investment by fiduciaries.
Neither the Partnership nor the Board shall be required to
obtain any court order to deal with any Partnership Property or
take any other action hereunder.
The foregoing clauses shall each be construed as purposes,
objects and powers, and it is hereby expressly provided that the
foregoing enumeration of specific purposes, objects and powers
shall not be held to limit or restrict in any manner the powers
of the Partnership, and that they are in furtherance of, and in
addition to, and not in limitation of, the general powers
conferred upon the Partnership by the Delaware Act and the other
laws of the State of Delaware or otherwise; nor shall the
enumeration of one thing be deemed to exclude another, although
it be of like nature, not expressed.
Section 3.2. Restrictions. Notwithstanding anything
in this Agreement to the contrary, the Partnership shall not be
authorized to and shall be specifically prohibited from entering
into any joint venture, general or limited partnership or any
other combination, association or venture with Kiewit or a
Kiewit Related Entity.
ARTICLE IV.
PARTNERS; CAPITAL STRUCTURE; PARTNER RIGHTS; AND MEETINGS
Section 4.1. Partners.
The name, address and Interest in the Partnership of each
Partner shall be set forth in the books and records of the
Partnership. The Partners shall have voting rights set forth in
this
9
Agreement and any other voting rights (i) provided under
the Delaware Act to limited partners of a limited partnership
and (ii) provided to securities holders of a registered
investment company under the 1940 Act, except as the ESC Order
may otherwise limit such voting rights of Limited Partners under
the 1940 Act. Partners shall have all rights to any allocations
and to any distributions as may be authorized and set forth
under this Agreement and under the Delaware Act.
Section 4.2. Capital
Structure.
(a) Subject to the terms of this Agreement, the Partnership
is authorized to issue Units solely to, and to admit to the
Partnership as Limited Partners, Eligible Purchasers. The Board
may, from time to time, institute such terms and conditions on
the issuance of Units or admission to the Partnership as the
Board shall determine in its discretion. Such authorized Units
shall constitute an unlimited number of limited partnership
interests under the Delaware Act and shall be without par value.
Other than as otherwise set forth in this Agreement, each Unit
shall be identical in all respects with each other Unit and
shall represent an equal proportionate undivided interest in the
assets of the Partnership. Units may be subdivided or combined
into such number of equal, indivisible shares as the Board may
determine; provided that such division or combination may not
materially change the proportionate Units of the Partners in the
Partnership. The Board shall undertake a combination or
“reverse split” of Units, if necessary, at the end of
a Fiscal Quarter such that the Net Asset Value per Unit is equal
to at least $10,000.
(b) The Board may reissue or cancel any Units acquired by
the Partnership. The number of Units issued to Limited Partners
shall be listed in the books and records of the Partnership,
which shall be amended from time to time by the Partnership as
required to reflect issuances of Units to Limited Partners,
changes in the number of Units held by Limited Partners and to
reflect the addition or cessation of Partners. The number of
Units held by each Limited Partner shall not be affected by any
(i) issuance by the Partnership of Units to other Partners
or (ii) change in the Capital Account of such Partner
(other than such changes to reflect additional investments in
the Partnership from such Partner). No Unit shall have any
priority or preference over any other Unit with respect to
distributions paid in the ordinary course of business or
distributions upon dissolution and liquidation of the
Partnership made pursuant to Section 11.4 hereof.
(c) All Units issued pursuant to, and in accordance with
the requirements of, this Article IV shall be fully
paid and non-assessable Interests in the Partnership, except as
such non-assessability may be affected by Section 17-607 of
the Delaware Act.
Section 4.3. Ownership of
Units. The ownership of Units shall be recorded on the books
and records of the Partnership kept by the Partnership or by a
transfer or similar agent for the Partnership. No certificates
certifying the ownership of Units shall be issued unless
directed by the Board. The Board may make such rules as it
considers appropriate for the issuance of Units, the transfer of
Units and similar matters. The books and records of the
Partnership as kept by the Partnership or any transfer or
similar agent, as the case may be, shall be conclusive as to who
are the Limited Partners and as to the Interests in the
Partnership of, and the number of Units of held by, from time to
time, each such Limited Partner.
Section 4.4. No Management
Responsibility. No Limited Partner, in such capacity, shall
participate in the management or control of the business of, or
transact any business for, the Partnership, but may exercise the
voting rights and powers of a Limited Partner set forth in this
Agreement. All management responsibility is vested in the Board.
The Limited Partners hereby consent to the taking of any action
by the Board or the Officers permitted to be taken under this
Agreement, the Delaware Act, the 1940 Act or the Exemptive Order.
Section 4.5. No Authority
to Act. No Limited Partner, in such capacity, shall have the
power to represent, act for, sign for, or bind the Partnership.
All authority to act on behalf of the Partnership is vested in
the Board and the Officers, subject only to
Section 5.1. The Limited Partners consent to the
exercise by the Board and the Officers (and, to the extent set
forth in Section 5.1, the General Partner) of the
powers conferred on them under this Agreement or otherwise
permitted under the Delaware Act, the 1940 Act or the Exemptive
Order.
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Section 4.6. No Preemptive
Rights. Holders of Units will have no preemptive rights with
respect to the issuance of any Unit or other equity interest in
the Partnership or any other securities of the Partnership
convertible into, or carrying rights or options to purchase any
such Partnership or other equity interest.
Section 4.7. Redemption or
Repurchase Rights. Except as otherwise provided in this
Agreement or required by applicable law, (a) the
Partnership shall have no right or obligation to redeem or
repurchase any Unit and (b) no Limited Partner or other
Person holding a Unit shall have the right to withdraw from the
Partnership or to receive any return of any Capital Contribution
or all or any portion of its Capital Account.
Section 4.8. Power to
Change Provisions Relating to Units. Notwithstanding
anything expressed or implied to the contrary in this Agreement,
the General Partner and the Board shall have the power to amend
this Agreement, and the General Partner shall have the power to
amend the Certificate of Limited Partnership, at any time and
from time to time, in such manner as the Board may determine,
without the need for Limited Partner action, so as to add to,
delete, replace or otherwise modify any provision relating to
the Units contained in this Agreement, including any provision
relating to the repurchase of Units by the Partnership or
Transfers of Units; provided that Limited Partner approval shall
be required to adopt any amendment to this Agreement that would
materially, adversely affect the rights and preferences of the
Units already issued or the rights and preferences of any class
of Limited Partners associated with any Units; provided further
that no such addition, deletion, replacement or other
modification shall be made that would adversely affect the
classification of the Partnership as a partnership for United
States federal income tax purposes.
Section 4.9. Limited
Partner Meetings. Unless required by the Delaware Act, the
1940 Act, the Exemptive Order or other applicable law, the
Partnership is not required to hold annual or other regular
meetings of Limited Partners. The Partnership may from time to
time conduct such meetings as determined by the Board. Special
meetings of the Limited Partners may be called by a Majority in
Interest of the Limited Partners; provided that special meetings
of Limited Partners for the purpose of electing Directors may be
called by Unitholders holding 10% of outstanding Units.
Section 4.10. Voting;
Quorum of Limited Partners; Vote Required. Except as
otherwise set forth herein, each Limited Partner shall be
entitled to one vote per Unit and a proportionate fractional
vote for each fractional Unit upon all matters upon which
Limited Partners have the right to vote, or other matters that
the Board has determined to submit to the vote of Limited
Partners, based upon the Units of the Partnership as set forth
in the records of the Partnership as of the applicable Record
Date. The presence, in person or by proxy, of a Majority in
Interest of the Limited Partners at the Record Date constitutes
a quorum for the transaction of business. If a quorum is
present, the affirmative vote, in person or by proxy, of the
owners of more than 50% of the issued and outstanding Units
represented in person or by proxy at the meeting and entitled to
vote on the subject matter shall be the action of the Limited
Partners, unless the vote of a greater proportion or number or
voting by classes is required by the Delaware Act, the 1940 Act
or this Agreement. If a quorum is not represented at any meeting
of the Limited Partners, such meeting may be adjourned by an
Officer.
Section 4.11. Voting
Rights. In addition to any provision of the Agreement which
sets forth Limited Partners’ voting rights with respect to
any action, the Limited Partners shall have the following voting
rights:
| (a) to the extent required by the 1940 Act or as otherwise provided for herein, the right to elect Directors by the affirmative vote of a plurality of votes cast; | |
| (b) to the extent required by the 1940 Act, the right to terminate the Partnership’s independent accountants by the affirmative vote of a 1940 Act Majority of Limited Partners; | |
| (c) so long as the Partnership is subject to the provisions of the 1940 Act, the right to approve any other matters required by the 1940 Act to be approved by the Limited Partners by the affirmative vote of a 1940 Act Majority of Limited Partners; | |
| (d) the right to remove the General Partner by the affirmative vote of a Majority in Interest of Limited Partners; and | |
| (e) any other matter as determined by the Board. |
11
The phrase “to the extent required by the 1940 Act”
means as required by the 1940 Act unless the Exemptive Order
otherwise permits the Partnership to operate without such a vote.
Section 4.12. Consent.
(a) Notwithstanding anything expressed or implied to the
contrary in this Agreement but subject to paragraph (b) of
this Section 4.12, no vote, approvals, or other
consent shall be required of the Limited Partners to amend this
Agreement in any of the following respects: (i) to reflect
any change not prohibited by the Delaware Act or the 1940 Act in
the amount or character of the Interest of any Limited Partner;
(ii) to admit a Limited Partner or a Substituted Limited
Partner or repurchase a Limited Partner’s Units in
accordance with the terms of this Agreement; (iii) to
correct any false or erroneous statement, or to make a change in
any statement in order that such statement shall accurately
represent the agreement among the Limited Partners, in this
Agreement; (iv) to reflect any change that is necessary to
qualify the Partnership as a limited partnership under the laws
of any state or that is necessary or advisable in the discretion
of the Board to assure that the Partnership (1) is an
Employees’ Securities Company and (2) will not be treated
as a publicly traded partnership or otherwise treated as a
corporation for United States federal income tax purposes;
(v) to reflect any change in the principal place of
business of the Partnership; (vi) to make any other change
or amendment that does not require the vote, approval or consent
of Limited Partners under the 1940 Act, the Delaware Act or
expressly hereunder, provided that such change or amendment has
been approved by a majority of the Board.
(b) Any amendment that would (x) obligate a Limited
Partner to make any contribution to the capital of the
Partnership; or (y) reduce the Capital Account of a Limited
Partner other than in accordance with the provisions of this
Agreement, may be made only if (i) the written consent of
each Limited Partner adversely affected thereby is obtained
prior to the effectiveness thereof or (ii) such amendment
does not become effective until (A) each Limited Partner
has received written notice of such amendment and (B) any
Limited Partner objecting to such amendment has been afforded a
reasonable opportunity (pursuant to such procedures as may be
prescribed by the Board) to tender his or her Units for
repurchase by the Partnership.
Section 4.13. Limitations
on Requirements for Consents. Notwithstanding any other
provisions of this Agreement, but subject to the requirements of
the 1940 Act, in the event that counsel for the Partnership
shall have delivered to the Partnership an opinion to the effect
that either the existence of a particular consent right or
particular consent rights, or the exercise thereof, will violate
the provisions of the Delaware Act or the laws of the other
jurisdictions in which the Partnership is then formed or
qualified or will adversely affect the limited liability of the
Limited Partners, will adversely affect the Partnership’s
status as an Employees’ Securities Company, or will
adversely affect the classification of the Partnership as a
partnership for United States federal income tax purposes, then
notwithstanding the other provisions of this Agreement, the
Limited Partners shall no longer have such right, or shall not
be entitled to exercise such right in the instant case, as the
case may be.
Section 4.14. Informal
Action by Limited Partners. Any action that may be taken by
Limited Partners at a meeting of Limited Partners may be taken
without a meeting without prior notice and without a vote if the
action is approved by the Board and a consent in writing setting
forth the action to be taken is signed by the Limited Partners
holding not less than the minimum percentage of Units that would
be necessary to authorize or take such action at a meeting at
which all the Limited Partners were present and voted, with
prompt written notice thereof delivered to all Limited Partners.
Any such written consent by the Limited Partners has the same
force and effect as a vote of such Limited Partners held at a
duly held meeting of the Limited Partners and may be stated as
such in any document.
Section 4.15. No Cumulative
Voting. Limited Partners shall not be entitled to cumulative
voting in any circumstance.
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Section 4.16. Representations
and Warranties of Limited Partners; Indemnification.
(a) Each Limited Partner hereby represents and warrants to
the Partnership and each other Limited Partner as follows:
| (i) such Limited Partner: (A) is familiar with the proposed business, financial condition, properties, operations and prospects of the Partnership, and has asked such questions and conducted such due diligence concerning such matters and concerning its acquisition of any Partnership interests as it has desired to ask and conduct, and all such questions have been answered to its full satisfaction; (B) understands that owning Units involves various risks, including the restrictions on transferability set forth in this Agreement, lack of any public or other market for such Units, the risk of owning its Units for an indefinite period of time and the risk of losing its entire investment in the Partnership; (C) is able to bear the economic risk of such investment; and (D) is acquiring its Units for investment and solely for its own beneficial account and not with a view to or any present intention of directly or indirectly selling, transferring, offering to sell or transfer, participating in any distribution or otherwise disposing of all or a portion of its Units; | |
| (ii) such Limited Partner shall not Transfer or offer to Transfer such Limited Partner’s Units without compliance with the conditions and provisions of this Agreement; | |
| (iii) if such Limited Partner Transfers all or any part of such Limited Partner’s Units, then, until such time as one or more transferees thereof are admitted to the Partnership as a Substituted Limited Partner with respect to the Units so Transferred, the matters to which any such transferee thereof would covenant and agree if such transferee were to execute this Agreement as a Limited Partner shall be and remain true; | |
| (iv) such Limited Partner shall notify the Board immediately if any representations or warranties made herein should be or become untrue; and | |
| (v) such Limited Partner shall not take any action that could have the effect of causing the Partnership (A) to lose its status as an Employees’ Securities Company or (B) to be treated as a publicly traded partnership for purposes of Section 7704(b) of the Code or otherwise to be treated as a corporation for United States federal income tax purposes. |
(b) Each Limited Partner hereby indemnifies the Partnership
and each other Partner from and against and agrees to hold the
Partnership and each other Partner free and harmless from, any
and all claims, losses, damages, liabilities, judgments, fines,
settlements, compromises, awards, costs, expenses, taxes or
other amounts (including any attorney fees, expert witness fees
or related costs) arising out of or otherwise related to a
breach of any of the representations and warranties of such
Limited Partner as set forth in this Section 4.16.
Section 4.17. No Obligation
to Restore a Capital Account Deficit. Except as may be
required by law, no Partner shall be required to reimburse the
Partnership for any negative balance in such Partner’s
Capital Account.
ARTICLE V.
MANAGEMENT OF THE FUND
Section 5.1. General
Partner Delegation. The management, control and operation of
the Partnership and its business and affairs are hereby
irrevocably delegated by the General Partner to the Board
pursuant to Section 17-403 of the Delaware Act and the Initial
Limited Partner hereby expressly approves such delegation;
provided however that the General Partner shall take such action
with respect to the Partnership as is specifically provided in
this Agreement. As a result of the delegation of the General
Partner’s duties herein, the General Partner shall be
responsible for performing only the following duties with
respect to the Partnership: (a) to execute and file with
the office of the Secretary of State the Certificate of Limited
Partnership and any amendments thereto or restatements thereof
required to be filed pursuant to the Delaware
13
Act; (b) to execute and file any other certificates
required to be filed on behalf of the Partnership with the
office of the Secretary of State; (c) to execute any
amendments to or restatements of this Agreement in accordance
with the terms of this Agreement (including the By-Laws); and
(d) to perform any other action that the Delaware Act
requires be performed by a general partner of a limited
partnership (and which may not be performed by a delegate of a
general partner).
Section 5.2. Board of
Directors. Except as otherwise provided in
Section 5.1, the management and operation of the
Partnership and its business and affairs shall be, and hereby
is, vested solely in the Board, and in no event shall any
Limited Partner in such capacity have any role in the management
of the Partnership’s affairs. Subject to any voting powers
of Units as set forth in this Agreement or by resolution of the
Board, the Board shall be governed as set forth in this
Section 5.2. The number of Directors shall be set
from time to time by action of the Board as provided in the
By-Laws. The Directors shall be set forth in the official
records of the Partnership. The Directors shall hold office
until their successors are approved and elected, unless they are
sooner removed, resign or are Incapacitated pursuant to
Section 5.7, as the case may be. Directors may
succeed themselves in office. No reduction in the number of
Directors shall have the effect of removing any Director from
office unless specially removed pursuant to
Section 5.7 at the time of such decrease. Subject to
the requirements of the 1940 Act, the Board may designate
successors to fill vacancies created by an authorized increase
in the number of Directors, or the resignation, removal or
Incapacity of a Director pursuant to Section 5.7. In
the event that no Directors remain, the Officers shall continue
the business of the Partnership and shall perform all duties of
the Directors under this Agreement and shall as soon as
practicable call a special meeting of Limited Partners for the
purpose of approving and electing Directors. When Directors are
subject to election by Limited Partners, Directors are elected
by a plurality of the Units voting at the meeting. Directors
may, but need not be, admitted to the Partnership as Limited
Partners.
Section 5.3. Powers of the
Board.
(a) As provided in Section 5.1, subject to the
other provisions of this Agreement, the business and affairs of
the Partnership shall be managed by the Board, and such Board
shall have all powers necessary, desirable or convenient to
carry out that responsibility, including the power to engage in
securities or other transactions of all kinds on behalf of the
Partnership. The Board shall have full power and authority to do
any and all acts and to make and execute any and all contracts
and instruments that it may consider necessary or appropriate in
connection with the administration of the Partnership. The Board
shall not be bound or limited by present or future laws or
customs with regard to investment by trustees or fiduciaries,
but shall have full authority and absolute power and control
over the assets of the Partnership and the business of the
Partnership to the same extent as if the Directors were the sole
owners of the assets and business of the Partnership in their
own right, including such authority, power and control to do all
acts and things as the Board shall deem proper to accomplish the
purposes of this Partnership. Without limiting the foregoing,
the Board may (i) adopt, amend and repeal By-Laws, not
inconsistent with this Agreement, that provide for the
regulation and management of the affairs of the Partnership;
(ii) fill vacancies in or remove from its number in
accordance with this Agreement (and the By-Laws); (iii) may
elect and remove such Officers and appoint and terminate such
agents as it considers appropriate; (iv) provide for the
issuance and distribution of Units by the Partnership directly
or otherwise; (v) retain one or more Advisers;
(vi) repurchase or transfer Units pursuant to applicable
law; (vii) set Record Dates with respect to various matters
in the manner provided in the By-Laws; (viii) declare and
pay distributions of income and of capital gains to Limited
Partners from the Partnership Property; (ix) establish and
maintain such cash or cash equivalent reserves as it deems
appropriate in connection with the business of the Partnership,
including reserves for fees and expenses, working capital
purposes and potential claims, if any; and (x) in general,
delegate such authority as it considers necessary or desirable
to any Officer of the Partnership, any committee of the Board,
any agent or employee of the Partnership, or any such custodian,
transfer agent, distribution disbursing agent, shareholder
servicing agent, administrative services agent, distributor of
Units (if any) or Advisers. Any determination as to what is in
the best interests of the Partnership made by the Board in good
faith shall be conclusive. The powers delegated to the Board in
this Section 5.3 are without prejudice to the
delegated powers of the Board set forth in the other provisions
of this Agreement (and the By-Laws).
14
(b) In construing the provisions of this Partnership
Agreement, the presumption shall be in favor of a grant of power
to the Board. Unless otherwise specified herein or required by
law, any action by the Board shall be deemed effective if
approved or taken by a majority of the Directors then in office.
(c) The parties hereto intend that, except to the extent
otherwise expressly provided herein, each Director shall be
vested with the same powers, authority and responsibilities on
behalf of the Partnership as are customarily vested in a
director of a business corporation organized pursuant to the
General Corporation Law of the State of Delaware.
Section 5.4. Payment of
Expenses by the Partnership. For any Fiscal Period, the
Board is authorized to pay or cause to be paid out of
Partnership Property, all Partnership Expenses as the Board
deems fair and in compliance with this Agreement.
Section 5.5. Ownership of
Partnership Property. Legal title to all of the Partnership
Property shall at all times be considered to be vested in the
Partnership, except that the Board shall have the power to cause
legal title to any Partnership Property to be held by or in the
name of any Person as nominee or trustee, in street name or in
such other manner as the Board may, from time to time, deem
advisable in accordance with applicable law. The Board may hold
any assets of the Partnership in bearer form and deposit any
securities, assets or other property with a custodian or in a
depository, clearing corporation or similar corporation, either
domestic or foreign, including with or in the Adviser or any
Affiliate thereof, and may deposit or invest any cash or other
assets in one or more money market mutual funds or other
accounts of any Person.
Section 5.6. Service
Contracts. (a) Subject to such requirements and
restrictions as may be set forth in this Agreement (and the
By-Laws), the 1940 Act and/or the Exemptive Order, the Board
may, at any time and from time to time, contract for exclusive
or nonexclusive advisory and/or management services for the
Partnership with any Person; and any such contract may contain
such other terms as the Board may determine, including authority
for any such Adviser to determine from time to time without
prior consultation with the Board what securities and other
instruments or property shall be purchased or otherwise
acquired, owned, held, invested or reinvested in, sold,
exchanged, transferred, mortgaged, pledged, assigned,
negotiated, or otherwise dealt with or disposed of, and what
portion, if any, of the Partnership Property shall be held
uninvested and to make changes in the Partnership’s
investments, or such other activities as may specifically be
delegated to such party.
(b) The Board may also, at any time and from time to time,
contract with any Person appointing it or them as the exclusive
or nonexclusive distributor or underwriter for the Units or for
other securities to be issued by the Partnership, or appointing
it or them to act as the administrator, custodian, transfer
agent, distribution disbursing agent and/or shareholder
servicing agent for the Partnership.
(c) The Board is further empowered, at any time and from
time to time, to contract with any Persons to provide such other
services to the Partnership as the Board determines to be
necessary or desirable to the business of the Partnership.
Section 5.7. Resignation;
Removal; Incapacity.
(a) A Director may voluntarily resign from the Board upon
the giving of notice thereof to the Partnership, such
resignation to take effect upon receipt of such notice by the
Partnership or such later date as set forth in such notice.
(b) Any Director may be removed either: (i) with or
without cause by the action of at least two-thirds of the
remaining Directors; (ii) by failure to be re-elected by
the Limited Partners at a meeting of Limited Partners duly
called for such purpose; or (iii) by the affirmative vote
of a Majority in Interest of the Limited Partners. The removal
of a Director shall in no way derogate from any rights or powers
of such Director, or the exercise thereof, or the validity of
any actions taken pursuant thereto, prior to the date of such
removal.
(c) In the event of the Incapacity of a Director, such
Director shall immediately cease to be a Director. In the event
of the Incapacity of all Directors, an Officer shall as promptly
as practicable convene a meeting of Limited Partners for the
purpose of electing new Directors.
15
(d) The resignation, removal or Incapacity of a Director
shall not affect any rights or liabilities of such Director that
matured prior to such event.
Section 5.8. Meetings of
the Board.
(a) An annual meeting of the Board shall be held without
notice other than this provision. The Board may provide, by
resolution, the time and place, either within or without the
State of Delaware, for the holding of the annual meeting and any
additional regular meetings without notice other than such
resolution. Special meetings of the Board may be called by the
chairman of the Board, or, if no such chairman exists, at the
request of any two Directors. The person or persons authorized
to call special meetings of the Board may fix any place, either
within or without the State of Delaware, as the place for
holding any special meeting of the Board called by them. Written
notice of any special meeting of the Board shall be given as
follows: (i) by mail to each Director at the
Director’s mailing address at least five business days
prior to the meeting; or (ii) by personal delivery, e-mail
or facsimile transmission at least three business days prior to
the meeting to each Director. If mailed by post, such notice
shall be deemed to be delivered when deposited in the United
States mail, so addressed, with postage thereon prepaid. If
notice be given by e-mail or facsimile transmission, such notice
shall be deemed to be delivered when the e-mail or facsimile
transmission is transmitted by the sender.
(b) Any Director may waive notice of any meeting before,
during or after such meeting. The attendance of a Director at
any meeting shall constitute a waiver of notice of such meeting,
except where a Director attends a meeting for the express
purpose of objecting to the transaction of any business because
the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or
special meeting of the Board need be specified in the notice or
waiver of notice of such meeting.
(c) A majority of the number of Directors shall constitute
a quorum for the transaction of business at any meeting of the
Board, but if less than such majority is present at a meeting, a
majority of the Directors present may adjourn the meeting from
time to time without further notice. Except as otherwise
required by the Delaware Act, the 1940 Act, the Exemptive Order
or this Agreement, the action of the majority of the Directors
present at a meeting at which a quorum is present shall be the
action of the Board. Each Director shall be entitled to one vote
upon all matters submitted to the Board.
(d) Unless otherwise required by the 1940 Act, any action
required or permitted to be taken at any meeting of the Board or
by a committee thereof may be taken without a meeting without
prior notice and without a vote if the Directors that would be
required to approve such action at a meeting at which all
Directors were present and voted consent thereto in writing, and
the writing or writings are filed with the minutes of
proceedings of the Board or such committee.
(e) Any Director may participate in a meeting of the Board
or any committee thereof in person or by means of conference
telephone or similar communications equipment by which all
persons participating in the meeting can hear and speak to each
other at the same time. Other than specific matters for which
the 1940 Act requires an in-person meeting, such participation
shall constitute presence in person at the meeting. A Director
who is present at a meeting of the Board at which action on any
matter taken shall be presumed to have assented to the action
taken unless a dissent shall be entered in the minutes of the
meeting or unless the Director files a written dissent to such
action with the person acting as the secretary of the meeting
before the adjournment thereof or shall forward such dissent by
registered mail to the Partnership immediately after the
adjournment of the meeting. Such right to dissent shall not
apply to a Director who voted in favor of such action.
Section 5.9. Committees of
Directors. By resolution adopted by the Board, the Board may
designate one or more Directors to constitute a committee, any
of which shall have such authority in the management of the
Partnership as the Board shall designate.
Section 5.10. Director
Power to Bind Partnership. Unless the Board consists of one
Director, no Director (acting in his capacity as such) shall
have any authority to bind the Partnership to any third party
with respect to any matter except pursuant to a resolution
expressly authorizing such action which resolution is duly
adopted by the Board by the affirmative vote required for such
matter pursuant to the terms of this Agreement.
16
Section 5.11. Liability of
the Directors. No Director shall be (a) personally
liable for the debts, obligations or liabilities of the
Partnership, including any such debts, obligations or
liabilities arising under a judgment decree or order of a court;
(b) obligated to cure any deficit in any Capital Account;
(c) required to return all or any portion of any Capital
Contribution; or (d) required to lend any funds to the
Partnership.
Section 5.12. Reliance By
Third Parties. Notwithstanding any other provision of this
Agreement, any contract, instrument or act of the Board on
behalf of the Partnership shall be conclusive evidence in favor
of any third party dealing with the Partnership that the Board
has the authority, power and right to execute and deliver such
contract or instrument or to take such act on behalf of the
Partnership.
Section 5.13. Appointment
of Auditors. Subject to the approval or ratification of the
Limited Partners if and to the extent required under the 1940
Act and the Exemptive Order, the Board, in the name and on
behalf of the Partnership, is authorized to appoint independent
certified public accountants for the Partnership.
Section 5.14. Contracts
with Affiliates. The Board may, on behalf of the Partnership
subject to approval by a majority of the Directors who do not
have an interest in the contract and, subject to compliance with
the 1940 Act, enter into contracts for goods or services with
any Affiliate of a Director, Partner, Officer, Adviser or any
other person, provided that the Directors who are not interested
in the transaction find the terms thereof to be fair and
reasonable to the Partnership.
Section 5.15. Obligations
of the Directors. The Directors shall devote only such time
and effort to the Partnership business as, in their judgment,
may be necessary or appropriate to oversee the affairs of the
Partnership.
Section 5.16. Other
Business of Directors. Any Director and any Affiliate of any
Director may engage in or possess any interest in other business
ventures of any kind, nature or description, independently or
with others, whether such ventures are competitive with the
Partnership or otherwise. Neither the Partnership nor any
Partner shall have any rights or obligations by virtue of this
Agreement or the Partnership relationship created hereby in or
to such independent ventures or the income or profits or losses
derived therefrom, and the pursuit of such ventures, even if
competitive with the business of the Partnership, shall not be
deemed wrongful or improper. Neither the Directors nor any
Affiliate of any Director shall be obligated to present any
investment opportunity to the Partnership.
Section 5.17. Officers.
The responsibility for the day-to-day management and operation
of the Partnership and its business may be delegated by the
Board to the responsibility of one or more officers
(“Officers”) of the Partnership. The Officers shall,
subject to the supervision and control of the Board, exercise
all powers necessary and convenient for the purposes of the
Partnership, on behalf and in the name of the Partnership.
Notwithstanding anything to the contrary contained herein or the
By-Laws, the actions of an Officer in carrying on the business
of the Partnership as authorized herein shall bind the
Partnership. The parties hereto intend that, except to the
extent otherwise expressly provided herein, each Director shall
be vested with the same powers, authority and responsibilities
on behalf of the Partnership as are customarily vested in a
director of a business corporation organized pursuant to the
General Corporation Law of the State of Delaware.
Section 5.18. Limitations
on Board and Officers. Notwithstanding anything expressed or
implied to the contrary in this Agreement, the Board, the
Officers and the General Partner shall not (a) participate
in the establishment of a secondary market (or the substantial
equivalent thereof) with respect to the Units for purposes of
Treasury Regulation Section 1.7704-1(d)(1); or
(b) take any action that, in their good faith business
judgment, they knew or should have known would create a
significant risk of (i) causing the Partnership to be
treated as a publicly traded partnership for purposes of
Section 7704(b) of the Code or (ii) causing the
Partnership to be treated as a corporation for United States
federal income tax purposes; (iii) impairing the limited
liability of the Directors or Limited Partners; or
(iv) causing the Partnership to lose its status as an
Employees’ Securities Company.
Section 5.19. Compensation.
The Board may, from time to time, fix a reasonable amount of
compensation to be paid by the Partnership to the Directors.
Nothing herein shall in any way prevent the employment of any
Director for advisory, management, legal, accounting, investment
banking or other services and payment of the same by the
Partnership.
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ARTICLE VI.
CAPITAL ACCOUNTS AND ALLOCATIONS
Section 6.1. Capital
Accounts. A capital account (“Capital Account”)
shall be established and maintained on the Partnership’s
books and records with respect to each Partner, in accordance
with the provisions of Treasury Regulations
Section 1.704-1(b), including the following:
| (a) Each Partner’s Capital Account shall be increased by: (i) the amount of that Partner’s Capital Contribution; (ii) the amount of Net Profit (or items thereof) allocated to that Partner; and (iii) any other amounts appropriate under the Treasury Regulations. | |
| (b) Each Partner’s Capital Account shall be decreased by: (i) the amount of Net Loss (or items thereof) allocated to that Partner; (ii) all cash amounts distributed to that Partner pursuant to this Agreement (including any amounts distributed in repurchase of that Partner’s Units), other than any amount required to be treated as a payment for property or services for United States federal income tax purposes; (iii) the fair market value of any property distributed in kind to that Partner (including the fair market value of any property distributed in repurchase of that Partner’s Units), net of any liabilities secured by such distributed property that such Partner is considered to assume or take subject to for United States federal income tax purposes); and (iv) any other amounts appropriate under the Treasury Regulations. | |
| (c) All provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with the Code and Treasury Regulations thereunder and shall be interpreted and applied in a manner consistent with such law. |
Section 6.2. Allocations to
Capital Accounts.
(a) Partner Allocations. Except as provided in this
Agreement, all Net Profit (and items thereof) and all Net Loss
(and items thereof) shall be allocated to the Partners in
proportion to their Units.
(b) Additional Rule. In furtherance and not in
limitation of Section 6.2(a), and except as
otherwise provided in this Agreement, the Board may cause the
Partnership to allocate Net Profit (and items thereof) and Net
Loss (and items thereof) for any Fiscal Period in a manner that
the Board deems necessary or appropriate in order to effectuate
the intended economic sharing arrangement of the Partners as
reflected in Article VII, including, without
limitation, allocations intended to cause any distribution to
Limited Partners in accordance with Section 11.4(c) to be
equivalent to a distribution to Limited Partners that is pro
rata by Unit.
(c) Regulatory and Related Allocations.
Notwithstanding anything expressed or implied to the contrary in
this Agreement, the following special allocations shall be made
in the following order:
| (i) Minimum Gain Chargeback. Except as otherwise provided in Treasury Regulations Section 1.704-2, if there is a net decrease in Partnership Minimum Gain during any Fiscal Period, each Partner shall be specially allocated items of Partnership income and gain for such Fiscal Period (and, if necessary, subsequent Fiscal Periods) in an amount equal to such Partner’s share of the net decrease in such Partnership Minimum Gain, as determined in accordance with Treasury Regulations Section 1.704-2. Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to the Partners pursuant thereto. The items to be so allocated shall be determined in accordance with Treasury Regulations Section 1.704-2. This Section 6.2(c)(i) is intended to comply with the minimum gain chargeback requirements in such Treasury Regulations and shall be interpreted consistently therewith. | |
| (ii) Partner Minimum Gain Chargeback. Except as otherwise provided in Treasury Regulations Section 1.704-2, if there is a net decrease in Partner Nonrecourse Debt Minimum Gain attributable to Partner Nonrecourse Debt during any Fiscal Period, each Partner shall be specially allocated items of Partnership income and gain for such Fiscal Period (and, if necessary, subsequent Fiscal Periods) in an amount equal to such Partner’s share, if any, of the net decrease in Partner Nonrecourse Debt Minimum Gain attributable to such Partner’s Partner Nonrecourse Debt, as determined in accordance with | |
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| Treasury Regulations Section 1.704-2. Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant thereto. The items to be so allocated shall be determined in accordance with Treasury Regulations Section 1.704-2. This Section 6.2(c)(ii) is intended to comply with the minimum gain chargeback requirements in such Treasury Regulations and shall be interpreted consistently therewith. | |
| (iii) Qualified Income Offset. In the event any Partner unexpectedly receives any adjustments, allocations or distributions described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6) with respect to such Partner’s Capital Account, items of Partnership income and gain shall be specially allocated to each such Partner in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of such Partner as quickly as possible; provided, however, that an allocation pursuant to this Section 6.2(c)(iii) shall be made only if and to the extent that such Partner would have an Adjusted Capital Account Deficit after all other allocations provided for in this Section 6.2 have been tentatively made as if this Section 6.2(c)(iii) were not in this Agreement. This Section 6.2(c)(iii) is intended to constitute a “qualified income offset” within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. | |
| (iv) Gross Income Allocation. In the event any Partner has an Adjusted Capital Account Deficit, items of Partnership income and gain shall be specially allocated to such Partner in an amount and manner sufficient to eliminate such Partner’s Adjusted Capital Account Deficit as quickly as possible; provided, however, that an allocation pursuant to this Section 6.2(c)(iv) shall be made only if and to the extent that such Partner would have an Adjusted Capital Account Deficit after all other allocations provided for in this Section 6.2 (other than Section 6.2(c)(iii)) have been tentatively made as if this Section 6.2(c)(iv) were not in this Agreement. | |
| (v) Nonrecourse Deductions. Any Nonrecourse Deductions for any Fiscal Period shall be allocated to the Partners in proportion to their respective Units. | |
| (vi) Partner Nonrecourse Deductions. Any Partner Nonrecourse Deductions for any Fiscal Period shall be allocated to the Partner who bears the economic risk of loss with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable in accordance with Treasury Regulations Section 1.704-2. | |
| (vii) Loss Allocation Limitation. No allocation of Net Loss (or items thereof) shall be made to any Partner to the extent that such allocation would create or increase an Adjusted Capital Account Deficit with respect to such Partner. | |
(d) Curative Allocations. The allocations set forth
in Section 6.2(c) (the “Regulatory
Allocations”) are intended to comply with certain
requirements of Treasury Regulations under Section 704 of
the Code. Notwithstanding any other provision of this
Article VI (other than the Regulatory Allocations),
the Regulatory Allocations shall be taken into account in
allocating other Partnership items of income, gain, loss,
deduction and expense among the Partners so that, to the extent
possible, the net amount of such allocations of other
Partnership items and the Regulatory Allocations shall be equal
to the net amount that would have been allocated to the Partners
pursuant to this Section 6.2 if the Regulatory
Allocations had not occurred.
(e) Section 754 and Similar Adjustments.
Pursuant to Treasury Regulations
Section 1.704-1(b)(2)(iv)(m), or as may otherwise be
appropriate, to the extent an adjustment to the adjusted tax
basis of any Partnership asset under Section 734(b) or
Section 743(b) of the Code is required to be taken into
account in determining Capital Accounts, the amount of such
adjustment to the Capital Accounts shall be treated as an item
of gain (if the adjustment increases the basis of the asset) or
loss (if the adjustment decreases such basis) and such gain or
loss shall be specially allocated to the Partners in a manner
consistent with the manner in which their Capital Accounts are
required to be adjusted pursuant to such Treasury Regulations.
(f) Transfer of or Change in Units. The Board is
authorized to adopt any convention or combination of conventions
regarding the allocation and/or special allocation of items of
income, gain, loss, deduction and
19
expense with respect to a newly issued Unit, a transferred Unit
and a repurchased Unit. Upon admission as a Substituted Limited
Partner, a transferee of a Unit shall succeed to the Capital
Account of the transferor Partner to the extent it relates to
the transferred Unit.
(g) Certain Expenses. The Partnership’s initial
syndication and organization expenses as defined in
Section 709 of the Code (and, to the extent necessary as
determined by the Board, any other items) shall be allocated to
the Capital Account of the General Partner, unless otherwise
paid by Kiewit.
Section 6.3. Tax
Allocations. The income, gains, losses, deductions and
expenses of the Partnership shall be allocated for United States
federal, state and local income tax purposes among the Partners
so as to reflect, in the judgment of the Board, the Interests of
the Partners in the Partnership set forth in this Agreement. The
Board may: (a) select such tax allocation methods as may in
the Board’s judgment be appropriate under
Section 704(c) of the Code, including an “aggregate
approach” involving “partial netting” or
“full netting” with respect to reverse section 704(c)
allocations to the extent permitted by Treasury Regulations
Section 1.704-3; (b) make special allocations of gain,
income or loss to Limited Partners all or part of whose
Interests have been repurchased by the Partnership;
(c) determine the allocation of specific items of income or
loss on a gross rather than net basis; (d) determine the
allocation of specific items of income, gain, loss, deduction
and credit of the Partnership; and (e) vary any and all of
the foregoing allocation provisions to the extent necessary in
the judgment of the Board to comply with section 704 of the Code
and applicable regulations. The Partners are aware of the
potential United States income tax consequences of the
allocations made by this Section 6.3 and hereby
agree to be bound by the provisions of this
Section 6.3 in reporting their shares of Partnership
income and loss for United States income tax purposes.
Section 6.4. Determinations
by Board. All matters concerning the computation of Capital
Accounts, the allocation of Net Profit (and items thereof) and
Net Loss (and items thereof), the allocation of items of
Partnership income, gain, loss, deduction and expense for tax
purposes, the adoption or modification of any accounting
procedures or elections and financial reporting not expressly
provided for by the terms of this Agreement shall be determined
by the Board. Such determination shall be final and conclusive
as to all the Partners. Notwithstanding anything expressed or
implied to the contrary in this Agreement, in the event the
Board shall determine that it is prudent to modify the manner in
which the Capital Accounts or tax basis accounts, or any debits
or credits thereto, are computed in order to effectuate the
intended economic sharing arrangement of the Partners as
reflected in Article VII, the Board may make such
modification without the approval of Partners.
ARTICLE VII.
NET ASSET VALUE;
DISTRIBUTIONS AND WITHDRAWALS
Section 7.1. Net Asset
Value. The Board shall have the power to offer and sell
Units of the Partnership at a price not less than the Net Asset
Value thereof as determined pursuant to the procedures of the
Partnership. The Board may prescribe such bases and time for
determining the Net Asset Value of the Units of the Partnership
or net income attributable to the Units of the Partnership, or
the declaration and payment of distributions on the Units of the
Partnership, as it may deem necessary or desirable.
Section 7.2. Valuation of
Assets. Except as may be required by the 1940 Act, the Board
shall value or have valued any securities held by the
Partnership and any other assets and liabilities of the
Partnership as of the close of business on the last Business Day
of each Fiscal Period in accordance with such valuation
procedures as shall be established from time to time by the
Board. The value of securities held by the Partnership and other
assets and liabilities of the Partnership determined pursuant to
this Section 7.2 shall be conclusive and binding on
all of the Partners and all parties claiming through or under
them.
Section 7.3. Distributions.
After provision for Partnership Expenses and establishment of
working capital and other reserves as the Board shall deem
appropriate, the Board may cause all or any part of cash and
other Partnership Property to be distributed to the Partners of
record on the Record Date set by the Board
20
with respect to such distribution, in proportion to the
Partners’ Units. A Director, in its capacity as a Director,
shall not be entitled to any distributions.
Section 7.4. Restrictions
on Distributions. Notwithstanding anything expressed or
implied to the contrary in this Agreement, no distribution shall
be made if, as determined by the Board, such distribution would
violate any contract or agreement to which the Partnership is
then a party, the Delaware Act or any other law, rule,
regulation, order or directive of any governmental authority
then applicable to the Partnership.
Section 7.5. Deemed Sale of
Assets. For all purposes of this Agreement, (a) any
property (other than United States dollars) that is distributed
in kind to one or more Partners with respect to a Fiscal Period
(including any such in kind property that is distributed upon
the dissolution and winding up of the Partnership) shall be
deemed to have been sold for cash equal to its fair market
value, (b) the unrealized gain or loss inherent in such
property shall be treated as recognized gain or loss for
purposes of determining the Net Profit and Net Loss,
(c) such gain or loss shall be allocated pursuant to
Article VI for such Fiscal Period and (d) such
in kind distribution shall be made after giving effect to such
allocation.
Section 7.6. Withholding
and Other Tax Payments and Expenses. (a) To the extent
the Partnership is required to withhold or to make tax payments
on behalf of or with respect to any Partner, the Board may
withhold such amounts and make such tax payments as so required
(“Tax Withholding”). To the extent that the
Partnership would have distributed, on the date of such Tax
Withholding, a cash distribution to such Partner but for such
Tax Withholding, such Partner shall be deemed for all purposes
of this Agreement to have received a distribution from the
Partnership as of the time of such Tax Withholding. To the
extent that the Tax Withholding exceeds the cash distribution
that the Partnership would have made to such Partner on such
date but for the Tax Withholding, such excess shall be treated
as an advance to such Partner made on the date of the Tax
Withholding (“Withholding Advance”) and the
Board shall promptly notify such Partner as to the amount of
such advance. All Withholding Advances made on behalf of a
Partner, plus interest thereon at a rate determined by the
Board, from the date of such Withholding Advances, shall
(i) be paid on demand from the Partnership by the Partner
on whose behalf such Withholding Advances were made or
(ii) with the consent of the Board, in its discretion, be
repaid by reducing the amount of the current or next succeeding
distribution or distributions which would otherwise have been
made to such Partner or, if such distributions are not
sufficient for that purpose, by so reducing amounts otherwise
payable to such Partner upon repurchase of such Partner’s
Units pursuant to this Agreement or upon liquidation of the
Partnership. Whenever repayment of a Withholding Advance by a
Partner is made as described in clause (ii) above, for all
other purposes of this Agreement such Partner shall be treated
as having received all distributions unreduced by the amount of
such Withholding Advance and interest thereon. The Partnership
may hold back from any distribution in kind to a Partner
property having a value equal to the amount of any taxes
required to be withheld until the Partnership has received
payment of such amount from such Partner. Each Partner hereby
agrees to indemnify the Partnership, the Board, and any other
person that may be considered a withholding agent with respect
to any taxes required to be withheld or made on behalf of or
with respect to any Partner for any liability with respect to
Withholding Advances (including interest thereon) required or
made on behalf of or with respect to such Partner (including
penalties imposed with respect thereto).
(b) Except as otherwise provided for in this Agreement and
unless prohibited by the 1940 Act, any expenditures payable by
the Partnership, to the extent determined by the Board (or its
designated agent) to have been paid or withheld on behalf of, or
by reason of particular circumstances applicable to, one or more
but fewer than all of the Partners, shall be charged to only
those Partners on whose behalf such payments are made or whose
particular circumstances gave rise to such payments. Such
charges shall be treated as Tax Withholding subject to
Section 7.6(a), including the provisions of
Section 7.6(a) relating to Withholding Advances.
(c) Notwithstanding any other provision of this Agreement
to the contrary, the Board shall have the power to set off from
any amount owed a Partner pursuant to this Agreement any amount
owed by such Partner to the Partnership; provided, however, that
in no event will the Partnership withhold any amounts from a
Partner, require any payment from a Partner or allocate expenses
to a Partner, except in compliance with the 1940 Act.
21
Section 7.7. Interest.
No interest shall be paid or credited to the Partners with
respect to their Capital Contributions, their Capital Accounts
or upon any undistributed funds left on deposit with the
Partnership.
Section 7.8. Withdrawals.
No Partner will have any right to withdraw any amount from such
Partner’s Capital Account.
ARTICLE VIII.
REPURCHASE AND TRANSFER OF UNITS
Section 8.1. Repurchase
Offers.
(a) The Board may from time to time, in its discretion and
on such terms and conditions as it may determine, cause the Fund
to repurchase Units or portions thereof pursuant to written
tenders or other offers to purchase Units.
(b) In the event the Partnership determines to make a
repurchase offer pursuant to paragraph (a) of this
Section 8.1, the Partnership will provide advance notice of
its intention to conduct the repurchase offer to Limited
Partners (the “Advance Notice”), and each Limited
Partner agrees with the Partnership and each other Limited
Partner that it will not participate in such repurchase offer
unless, in response to such Advanced Notice, such Limited
Partner informs the Partnership in writing as to the Limited
Partner’s intention to tender a specified number of Units
pursuant to the repurchase offer no later than the date
specified in such Advanced Notice.
Section 8.2. Optional
Repurchases by the Partnership.
(a) The Board, in its discretion, may, from time to time
cause the Partnership to repurchase any or all Units from a
Limited Partner in any of the following events: (i) any
attempted direct or indirect unauthorized Transfer of Units by a
Limited Partner, (ii) a Board determination that the
continued participation in the Partnership by the Limited
Partner could jeopardize the tax or regulatory status of the
Partnership or otherwise harm the Partnership or the other
Limited Partners, (iii) any breach by the Limited Partner
of this Agreement or any other agreement between the Limited
Partner and the Partnership; or (iv) the Board determines that
it is in the best interest of the Partnership or any Limited
Partner to do so.
(b) The purchase price payable in respect of a repurchased
Unit pursuant to this Section 8.2 shall be equal to
the Unit’s Net Asset Value on the repurchase date and shall
be paid in cash, without interest, or, in the discretion of the
Board, in marketable securities (or any combination of
marketable securities and cash).
Section 8.3. Permitted
Transfers of Units.
(a) A Limited Partner may not Transfer all or any portion
of his, her or its Units to any Person except with the prior
written approval of the Partnership, which approval may be
granted or withheld in the discretion of the Partnership (a
Transfer so approved, a “Permitted Transfer”).
Any attempted Transfer of a Unit other than in accordance with
this Agreement shall be null and void and of no force or effect
whatsoever, and the purported transferee shall have no rights as
a Limited Partner; provided that such attempted Transfer shall
constitute a breach of this Agreement giving the Partnership the
right to repurchase such Unit pursuant to
Section 8.2 hereof and all other rights and remedies
hereunder or at law or in equity.
(b) Prior to approving a proposed Transfer as a Permitted
Transfer and admitting the proposed transferee as a Substituted
Limited Partner, the Partnership, in the Board’s
discretion, shall require the satisfaction of such conditions as
it determines appropriate, including without limitation, the
following:
| (i) such Transfer must be to a Person who is eligible to own Units of the Partnership; | |
| (ii) the transferring Limited Partner provides such proper notice to the Fund, which notice shall certify the identity of the transferee, that the transferee is a Person who is eligible to own Units of the Partnership, the number of Units proposed to be transferred (or all of such transferring Limited Partner’s fractional Unit if such Limited Partner holds less than one whole Unit) and such other information as requested by the Board; |
22
| (iii) such Transfer, itself or together with any other Transfers, would not result in the Partnership being treated as a publicly traded partnership within the meaning of Section 7704(b) of the Code or otherwise being treated as a corporation for United States federal income tax purposes; | |
| (iv) such Transfer does not require the registration or qualification of such Units pursuant to any applicable federal or state securities or “blue sky” laws; | |
| (v) such Transfer does not result in a violation of other laws ordinarily applicable to such transactions; | |
| (vi) the transferor Limited Partner and purported transferee each shall have represented to the Board in writing that the Units subject to such Transfer were not, and have never been, Transferred, directly or indirectly, on (A) any national securities exchange registered under section 6 of the 1934 Act, (B) any national securities exchange exempt from registration under section 6 of the 1934 Act, (C) any regional or local securities exchange (D) any non-U.S. securities exchange, or (E) any interdealer quotation system that regularly disseminates firm buy or sell quotations by identified brokers or dealers by electronic means or otherwise; | |
| (vii) the transferor Limited Partner and purported transferee shall each have represented to the Board in writing that such Transfer was not facilitated or effected, directly or indirectly, on or through (A) any person, such as a broker or a dealer, making a market in Units or (B) any person that makes available to the public (including customers or subscribers) bid or offer quotes with respect to Units or stands ready to effect buy or sell transactions at the quoted prices for itself or on behalf of others; | |
| (viii) no facts are known to the Board that cause the Board to conclude that such Transfer will have a material adverse effect on the Partnership; | |
| (ix) the transferee has executed and delivered to the Partnership a counterpart of this Agreement; | |
| (x) payment by the transferor Limited Partner or proposed transferee to the Partnership of an amount determined by the Board to be equal to the costs and expenses incurred in connection with such Transfer, including costs incurred in preparing and filing such amendments to this Agreement as may be required; | |
| (xi) if required by the Board, execution and affirmation to an instrument by the terms of which such Person acknowledges that the relevant Transfer of Units have not been registered under the of Securities Act, or any applicable state securities laws, and covenants, represents and warrants that such Person acquired the relevant Units for investment only and not with a view to the resale or distribution thereof; and | |
| (xii) any other information or documentation as the Board may request. |
(c) Upon the proper completion of the foregoing conditions
to the Board’s satisfaction, the books and records of the
Partnership and Schedule A hereto will be updated to
reflect the proposed transferee’s admission to the
Partnership as a Substituted Limited Partner.
Section 8.4 Employees’
Securities Company. Notwithstanding anything in this
Agreement to the contrary, no Transfer of Units may be made and
no Person may become a Limited Partner if, as a result thereof,
the Partnership would cease to be an Employees’ Securities
Company.
Section 8.5 Publicly Traded
Partnership Provisions. Notwithstanding anything expressed
or implied to the contrary in this Agreement, the Board shall
not repurchase any Units pursuant to Article VIII,
and the Board shall refuse to allow any Transfers of Units, if
the Board reasonably determines that such action would be
necessary or advisable to reduce any material risk that the
Partnership might be treated for United States federal income
tax purposes as a publicly traded partnership within the meaning
of Section 7704(b) of the Code.
23
Section 8.6 Actions
Relating to Provisions for Repurchases, Transfers. The Board
may interpret, and is hereby authorized to establish such rules
or take such actions, as it deems necessary or desirable to
effect, the provisions of this Article VIII.
Section 8.7 Transfer
Indemnity. Each Limited Partner hereby agrees to indemnify
and hold harmless the Partnership, the Directors, the General
Partner, each Officer and each other Limited Partner (and any
successor or assign of any of the foregoing) from and against
all costs, claims, damages, liabilities, losses and expenses
(including losses, claims, damages, liabilities, costs and
expenses of any judgments, fines and amounts paid in
settlement), joint or several, to which those persons may become
subject by reason of or arising from any Transfer (or purported
Transfer) made in contravention of the provisions of this
Agreement or any misrepresentation made by such Limited Partner
in connection with any Transfer (or purported Transfer).
ARTICLE IX.
BOOKS AND RECORDS; REPORTS TO LIMITED PARTNERS;
ACCOUNTING AND TAX MATTERS
Section 9.1. Books and
Records. In compliance with Section 31 of the 1940 Act,
the books and records of the Partnership, and a list of the
names and residences, business or mailing addresses and
Interests of all Limited Partners, shall be maintained at the
principal executive offices of the Partnership or such other
location as the Board may approve. The Partnership shall not be
required to provide any documentation or other information to
Limited Partners except that which it is required to provide
under the 1940 Act, the Delaware Act or other applicable law.
Each Limited Partner shall have the right to obtain from the
Partnership from time to time upon reasonable demand for any
proper purpose reasonably related to the Limited Partner’s
interest as a Limited Partner of the Partnership, and upon
paying the costs of collection, duplication and mailing, the
documents and other information which the Partnership is
required to provide under the 1940 Act, the Delaware Act or
other applicable law. Any demand by a Limited Partner pursuant
to this section shall be in writing and shall state the purpose
of such demand. The Partnership may maintain such other books
and records and may provide such financial or other statements
as the Board or the Officers deems advisable.
Section 9.2. Annual Reports
to Current Limited Partners. In addition to any report to
Limited Partners that may be required to be provided to Limited
Partners under the 1940 Act within 60 days after the end of
each Fiscal Year or as soon thereafter as practicable, the
Partnership shall have prepared and distributed to the Limited
Partners, at the expense of the Partnership, an annual report
containing a summary of the year’s activity and such
financial statements and schedules as may be required by law or
as the Board may otherwise determine.
Section 9.3. Accounting;
Tax Year.
(a) The books and records of the Partnership shall be kept
on the cash basis or the accrual basis, as determined by the
Board. The Partnership shall report its operations for tax
purposes on the cash method or the accrual method, as determined
by the Board. The taxable year of the Partnership shall be the
calendar year, unless the Board shall designate another taxable
year for the Partnership that is a permissible taxable year
under the Code.
(b) The books and records of the Partnership shall be
audited by the Partnership’s independent accountants as of
the end of each Fiscal Year, commencing with the first partial
Fiscal Year, of the Partnership.
Section 9.4. Tax Returns
and Information. The Board shall prepare and file, or cause
to be prepared and filed, on behalf of the Partnership, a United
States federal information tax return and any required state,
local and other income tax and information returns for the
Partnership, for each taxable year of the Partnership. The Board
shall determine whether or not to prepare and file (or cause to
be prepared and filed) composite, group or similar state, local
and foreign tax returns on behalf of the Limited Partners where
and to
24
the extent permissible under applicable law. Each Limited
Partner hereby agrees to execute any relevant documents
(including a power of attorney authorizing such a filing), to
furnish any relevant information and otherwise to do anything
necessary in order to facilitate any such composite, group or
similar filing. Any taxes paid by the Partnership in connection
with any such composite, group or similar filing shall be
treated as Tax Withholding subject to
Section 7.6(a), including the provisions of
Section 7.6(a) relating to Withholding Advances.
Section 9.5. Tax
Information for Current and Former Partners. The Partnership
shall use reasonable efforts to furnish to the Limited Partners
(and, to the extent necessary, to former Limited Partners (or
such Limited Partners’ or former Limited Partners’
legal representatives)), at the expense of the Partnership,
United States tax information reasonably required by Limited
Partners, former Limited Partners (or such legal
representatives) for United States income tax reporting purposes
with respect to such taxable year. The Partnership shall also
provide United States Schedules K-1 to Limited Partners as soon
as practicable after the end of each taxable year of the
Partnership.
Section 9.6. Tax
Elections. Except as otherwise provided herein, the Board
shall determine whether the Partnership makes, does not make,
changes, or revokes, any available election permitted for United
States federal income tax purposes, for Canadian tax purposes,
or for any other applicable tax purposes (including a
“check-the-box” election for the Partnership to be
treated as a partnership pursuant to Section 7701 of the
Code). The Board is further permitted to make any tax election
with respect to the Partnership on behalf of a Limited Partner
or a former Limited Partner (even if one or more Persons who
were Limited Partners during any portion of such prior period
are not Limited Partners as of the date of such election). Each
Limited Partner hereby consents to the foregoing.
Section 9.7. Tax Matters
Partner.
(a) The General Partner will be the tax matters partner
(the “Tax Matters Partner”) as provided in
Section 6231(a)(7) of the Code. The Board may designate and
authorize a Person, who may be the General Partner, for purposes
of subsection 165(1.15) of the Income Tax Act (Canada)
(“Canadian Representative”) and any
corresponding provincial income tax provision and for all other
purposes to make any objection or appeal in respect of a
determination relating to the Partnership under the Income Tax
Act (Canada) or any other Canadian federal or provincial income
tax legislation.
(b) Each Person (for purposes of this provision, a
“Pass-Through Limited Partner”) that holds or
controls a Unit on behalf of, or for the benefit of another
Person or Persons, or which Pass-Through Limited Partner is
beneficially owned (directly or indirectly) by another Person or
Persons shall, within 30 days following receipt from the
Tax Matters Partner or the Canadian Representative of a notice
or document, convey such notice or other document in writing to
all holders of beneficial interests in the Partnership holding
such Interest through such Pass-Through Limited Partner.
(c) All expenses incurred by the Tax Matters Partner and
the Canadian Representative in connection with any audit,
investigation, settlement or other tax-related matter involving
the Partnership shall be borne by the Partnership. The Tax
Matters Partner and the Canadian Representative shall not be
liable to the Partnership or any Limited Partner for any action
it takes or fails to take as Tax Matters Partner and the
Canadian Representative with respect to any administrative or
judicial proceeding involving “partnership items” (as
defined in Section 6231 of the Code) of the Partnership,
unless such action or failure to act constitutes willful
misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of such office. The
Partnership (but not the Limited Partners themselves) shall
indemnify the Tax Matters Partner and the Canadian
Representative as provided in Section 10.2 to the
same extent as if the Tax Matters Partner and the Canadian
Representative were an Indemnified Person.
(d) In the event the Partnership becomes the subject of an
income tax audit by any federal, state, local or Canadian
authority, to the extent the Partnership is treated as an entity
for purposes of such audit, including administrative settlement
and judicial review, the Tax Matters or the Canadian
Representative Partner shall be authorized to act for, and its
decision shall be final and binding upon, the Partnership and
each Partner. The Partnership shall bear all expenses incurred
in connection with any such audit, investigation, settlement or
review.
25
ARTICLE X.
LIABILITY AND INDEMNIFICATION
Section 10.1. Liability of
the Partners, Directors and Officers. Except for the
obligations hereunder, the liability of the Partners shall be
limited to the maximum extent permitted by the Delaware Act. No
Partner shall be liable or accountable, directly or indirectly
(including by way of indemnification, contribution, assessment
or otherwise), for any debts, obligations or liabilities, of, or
chargeable to, the Partnership or each other, whether arising in
tort, contract, or otherwise, which are created, incurred or
assumed by the Partnership (or owed, to creditors or Partners
during liquidation of the Partnership). In no event shall the
Partners be obligated to contribute additional capital to the
Partnership. If a Partner is required under the Delaware Act to
return to the Partnership or pay, for the benefit of creditors
of the Partnership, amounts previously distributed to such
Partner, the obligation of such Partner to return or pay any
such amount to the Partnership shall be the obligation of such
Partner and not the obligation of the Directors. Other than with
respect to any liability that results from a Director’s,
Officer’s or employee’s willful misfeasance, bad faith
or gross negligence in the performance of his or her duties or
by reason of his reckless disregard of his obligations and
duties, the liability of the Directors, Officers or employees,
shall be limited to the maximum extent permitted by the Delaware
Act.
Section 10.2. Indemnification.
(a) No Director, Officer (including Directors or Officers
who serve at the Partnership’s request as directors,
officers, members, partners or trustees of another organization
in which the Partnership has any interest as a stockholder,
creditor or otherwise), employee or General Partner, or any of
their respective Affiliates, shareholders, officers, directors,
partners, employees, agents and representatives (each an
“Indemnified Person”) shall have any liability,
responsibility or accountability in damages or otherwise to any
Limited Partner or the Partnership for, and the Partnership
agrees, to the fullest extent permitted by law, to indemnify,
pay, protect and hold harmless each Indemnified Person from and
against, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, proceedings, costs,
expenses and disbursements of any kind or nature whatsoever
(including all reasonable costs and expenses of attorneys,
defense, appeal and settlement of any and all suits, actions or
proceedings instituted or threatened against the Indemnified
Persons or the Partnership) and all costs of investigation in
connection therewith which may be imposed on, incurred by, or
asserted against the Indemnified Persons or the Partnership in
any way relating to or arising out of, or alleged to relate to
or arise out of, any action or inaction on the part of the
Partnership, on the part of the Indemnified Persons when acting
on behalf of the Partnership or otherwise in connection with the
business or affairs of the Partnership (collectively, the
“Indemnified Liabilities”); provided that the
Partnership shall not be liable to any Indemnified Person for
any portion of any Indemnified Liabilities which results from
such Indemnified Person’s willful misfeasance, bad faith or
gross negligence in the performance of his, her or its duties or
by reason of his, her or its reckless disregard of his, her or
its obligations and duties.
(b) Expenses, including reasonable counsel fees incurred by
any such Indemnified Person, shall be paid from time to time by
the Partnership in advance of the final disposition of any such
action, suit or proceeding upon receipt of an undertaking by or
on behalf of such Indemnified Person to repay amounts so paid to
the Partnership if it is ultimately determined that
indemnification of such expenses is not authorized under this
Section 10.2, provided, however, that either
(i) such Indemnified Person shall have provided appropriate
security for such undertaking, (ii) the Partnership shall
be insured against losses arising from any such advance payments
or (iii) either a majority of the Directors who are not
seeking such indemnification (the “Disinterested
Directors”), if any, acting on the matter (provided
that a majority of the Disinterested Directors, if any, then in
office act on the matter), or independent legal counsel
acceptable to the Partnership in a written opinion, shall have
determined, based upon a review of readily available facts (as
opposed to a full trial type inquiry) that there is reason to
believe that such Indemnified Person will be found entitled to
indemnification under this Article XI. The
Partnership shall pay any and all such expenses within sixty
(60) days after receipt of a written request therefor is
received by the Partnership, and the Partnership’s rights
to repayment of such amounts shall be secured by the Indemnified
Person’s Interest in the Partnership, if any, or by such
other security as the Board may require. In the event that a
final judicial (or binding arbitration)
26
determination is made that the Partnership is not so obligated
in respect of any amount paid by it to a particular Indemnified
Person, such Indemnified Person will refund such amount within
sixty (60) days of such final determination, and in the
event that a final determination is made that the Partnership is
so obligated in respect to any amount not paid by the
Partnership to a particular Indemnified Person, the Partnership
will pay such amount to such Indemnified Person within sixty
(60) days of such final determination, in either case
together with interest (at the lesser of (i) the Applicable
Rate and (ii) the maximum rate permitted by applicable law)
from the date paid by the Partnership until repaid by the
Indemnified Person or the date it was obligated to be paid by
the Partnership until the date actually paid by the Partnership
to the Indemnified Person.
(c) Any indemnification rights provided for in this
Section 10.2 shall be retained by any removed,
resigned or withdrawn Indemnified Person and its constituent
Indemnified Persons. Any indemnification rights provided for in
this Section 10.2 shall also be retained by any
Person who has acted in the capacity of Officer, Director,
employee, General Partner or affiliate of an Indemnified Person
after such Persons shall have ceased to hold such positions.
(d) The right of indemnification hereby provided shall not
be exclusive of or affect any other rights to which such
Indemnified Person may otherwise be entitled by contract or as a
matter of law or equity and shall extend to such Indemnified
Person’s successors, assigns and legal representatives. As
used in this Section 10.2, the term
“Indemnified Person” shall include such person’s
heirs, executors and administrators. Nothing contained in this
Article X shall affect any rights to indemnification
to which personnel of the Partnership and other Persons may be
entitled by contract or otherwise under law, nor the power of
the Partnership to purchase and maintain liability insurance on
behalf of any such Person; provided, however, that the
Partnership shall not purchase or maintain any such liability
insurance in contravention of applicable law, including the 1940
Act.
(e) As to any matter disposed of (whether by a compromise
payment, pursuant to a consent decree or otherwise) without an
adjudication by a court, or by any other body before which the
proceeding was brought, that such Indemnified Person is liable
to the Partnership or its Limited Partners by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his, her or its office,
indemnification shall be provided if (i) approved, after
notice that it involves such indemnification, by at least a
majority of the Disinterested Directors, if any, acting on the
matter (provided that a majority of the Disinterested Directors,
if any, then in office act on the matter) upon a determination,
based upon a review of readily available facts (as opposed to a
full trial type inquiry) that such Indemnified Person is not
liable to the Partnership or its Limited Partners by reason of
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his, her or
its office or (ii) there has been obtained an opinion in
writing of independent legal counsel acceptable to the
Partnership, based upon a review of readily available facts (as
opposed to a full trial type inquiry), that such Indemnified
Person is not liable to the Partnership or its Limited Partners
by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his,
her or its office. Any approval pursuant to this
Section 10.2(e) shall not prevent the recovery from
any Indemnified Person of any amount paid to such Indemnified
Person in accordance with this Section 10.2 as
indemnification if such Indemnified Person is subsequently
adjudicated by a court of competent jurisdiction to have been
liable to the Partnership or its Limited Partners by reason of
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of such
Indemnified Person’s office.
(f) For purposes of the opinions referred to in paragraphs
(b) and (e) of this Section 10.2,
independent legal counsel shall be entitled to rely upon a
rebuttable presumption that the Indemnified Person has not
engaged in willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such
Indemnified Person’s office.
(g) In case any Limited Partner or former Limited Partner
shall be held to be personally liable solely by reason of his,
her or its being or having been a Limited Partner and not
because of his, her or its acts or omissions or for some other
reason, the Limited Partner or former Limited Partner (or his,
her its heirs, executors, administrators or other legal
representatives or in the case of a corporation or other entity,
its
27
corporate or other general successor) shall be entitled to be
held harmless from and indemnified out of the assets of the
Partnership against all loss and expense arising from such
liability.
(h) The exercise by the Board of its powers and discretions
hereunder shall be binding upon everyone interested.
(i) No person dealing with the General Partner or the Board
shall be bound to make any inquiry concerning the validity of
any transaction made or to be made by the General Partner or the
Board or to see to the application of any payments made or
property transferred to the Partnership or upon its order.
(j) The General Partner, an employee, Officer or Director
shall be liable only for his, her or its own willful
misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of the office of such
General Partner, employee, Officer or Director, and shall not be
liable for errors of judgment or mistakes of fact or law. The
General Partner, employees, Officers and Directors may (but
shall not be required to) take advice of counsel or other
experts with respect to all matters, including the meaning and
operation of this Agreement, and shall be under no liability for
any act or omission in accordance with such advice or for
failing to follow such advice, but nothing herein contained
shall protect the General Partner, any employee, Officer, or
Director against any liability to which it, he or she would
otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties
involved in the conduct of its, his or her office. The General
Partner, employees, Officers and Directors shall not be required
to give any bond as such, nor any surety if a bond is required.
(k) The General Partner and the Directors shall not be
responsible or liable in any event for any neglect or wrongdoing
of any other Person, including any Officer, agent, employee,
Adviser, or distributor of Units (if any) of the Partnership;
the General Partner shall not be responsible for the act or
omission of any Director; and no Director shall be responsible
for the act or omission of any other Director or of the General
Partner. Nothing herein contained, however, shall protect the
General Partner or any Director against any liability to which
it, he or she would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his, her or its office.
(l) Every note, bond, contract, instrument, certificate or
undertaking and every other act or thing whatsoever issued,
executed or done by or on behalf of the Partnership, the General
Partner, the employees, Officers or the Directors or any of them
in connection with the Partnership shall be conclusively deemed
to have been issued, executed or done only in or with respect to
its, their, his, her or its capacity as the General Partner,
employees, Officers or Officer, Directors or Director, as the
case may be, and such General Partner, employees, Officers,
Directors or Director shall not be personally liable thereon.
(m) With respect to the liabilities of the Partnership, all
such liabilities: (i) shall be liabilities of the
Partnership as an entity, and shall be paid or otherwise
satisfied from the Partnership’s assets; and; (ii) except
to the extent otherwise required by law, shall not in any event
be payable in whole or in part by any Partner, employee,
Director or Officer, or by any director, officer, trustee,
employee, agent, shareholder, beneficiary, or partner of any of
them.
(n) The Directors may cause the Partnership, at the
Partnership’s expense, to purchase insurance to insure the
Indemnified Persons against liability hereunder (including
liability arising in connection with the operation of the
Partnership), including for a breach or an alleged breach of
their responsibilities hereunder.
ARTICLE XI.
TERM, DISSOLUTION AND LIQUIDATION
Section 11.1. Term.
Except as otherwise provided in Section 11.2, the
Partnership shall have perpetual existence.
Section 11.2. Dissolution.
(a) The Partnership shall be dissolved upon the happening
of: (i) the entry of a decree of judicial dissolution
under Section 17-802 of the Delaware Act; (ii) the
voluntary bankruptcy, liquidation or other
28
dissolution of the Partnership; (iii) the sale or other
disposition at any one time of all or substantially all of the
assets of the Partnership; (iv) the withdrawal of the
General Partner, unless (A) the Board, by majority vote,
elects to continue the business of the Partnership and appoint,
effective as of the date of the General Partner’s
withdrawal, one or more additional general partners or
(B) within 90 days after the withdrawal, Limited
Partners holding a majority of the outstanding Units elect to
continue the business of the Partnership and appoint, effective
as of the date of the General Partner’s withdrawal, one or
more additional general partners; (v) the election by the
Board to dissolve the Partnership, subject, to the extent
required by the 1940 Act, to the consent of the Limited
Partners; or (vi) dissolution required by operation of law.
(b) Dissolution of the Partnership shall be effective on
the day on which the event occurs giving rise to the
dissolution, but the Partnership shall not terminate until the
assets of the Partnership have been distributed as provided in
Section 11.4 and the Certificate of Limited
Partnership has been canceled.
Section 11.3. Events Not
Causing Dissolution. The Incapacity, withdrawal, resignation
or expulsion of, or the making of an assignment for the benefit
of creditors by, or any other act or circumstance with respect
to, a Limited Partner shall not cause the dissolution of the
Partnership. Except as otherwise determined by the Board, the
Partnership shall not be subject to dissolution at the election
of Limited Partners.
Section 11.4. Liquidation.
On dissolution of the Partnership, a liquidator (who shall be
selected by the Board, if still constituted, and otherwise shall
be a Person proposed and approved by a Majority in Interest of
the Limited Partners) shall cause to be prepared a statement
setting forth the assets and liabilities of the Partnership as
of the date of dissolution, and such statement shall be
furnished to all of the Limited Partners. Then those Partnership
assets that the liquidator determines should be liquidated shall
be liquidated as promptly as possible, but in an orderly and
business-like manner to maximize proceeds. Assets that the
liquidator determines to distribute in kind shall be so
distributed in a manner consistent with applicable law. If the
liquidator determines that an immediate sale at the time of
liquidation of all or part of the Partnership assets would be
unduly disadvantageous to the Limited Partners, the liquidator
may, either defer liquidation and retain the assets for a
reasonable time, or distribute the assets to the Limited
Partners in kind. The liquidator shall then wind up the affairs
of the Partnership and distribute the proceeds of the
Partnership by the end of the calendar year of the liquidation
(or, if later, within 90 days after the date of such
liquidation) in the following order or priority:
(a) to the payment of the expenses of liquidation and to
creditors (including Partners who are creditors, to the extent
permitted by law) in satisfaction of liabilities of the
Partnership other than liabilities for distributions to
Partners, in the order of priority as provided by law;
(b) to the setting up of any reserves that the liquidator
may deem necessary or appropriate for any anticipated
obligations or contingencies of the Partnership or of the
liquidator arising out of or in connection with the operation or
business of the Partnership. Such reserves may be paid over by
the liquidator to an escrow agent or trustee proposed and
approved by the liquidator to be disbursed by such escrow agent
or trustee in payment of any of the aforementioned obligations
or contingencies and, if any balance remains at the expiration
of such period as the liquidator shall deem advisable, to be
distributed by such escrow agent or trustee in the manner
hereinafter provided; then
(c) to the Partners or their legal representatives in
accordance with the positive balances in their respective
Capital Accounts, as determined after taking into account all
adjustments to Capital Accounts for all periods.
Section 11.5. Termination.
Following the payment or discharge, or the making of reasonable
provision for the payment or discharge, of Partnership Expenses
or other liabilities of the Partnership (including contingent
liabilities), and the distribution of the Partnership’s
assets, a certificate of cancellation for the Partnership shall
be filed by the liquidator with the office of the Secretary of
State and the Partnership shall thereafter be deemed terminated.
29
ARTICLE XII.
GENERAL PARTNER
Section 12.1. General
Partner. The initial General Partner is Kiewit Investment
Holdings Inc., a Delaware corporation. Such General Partner is
initially the sole general partner of the Partnership and is
admitted without acquiring an Interest in the Partnership (other
than its Interest as a Limited Partner); provided however, that
nothing herein shall prevent the General Partner from acquiring
an Interest in the Partnership, in its capacity as a general
partner of the Partnership, upon the creation of such Interests
by the Board.
Section 12.2. Additional
and Substitute General Partner. Without the consent of the
Limited Partners, the Board may designate an Affiliate of the
General Partner (the “Designee”) to be added or
substituted as a general partner. Any such Designee to be added
shall be deemed to be admitted upon its execution of this
Agreement. Any such Designee to be substituted shall be deemed
to be admitted immediately prior to the withdrawal of the
General Partner. Upon admission to the Partnership, the Designee
shall become, and have all of the rights, powers and duties of,
the General Partner for all purposes of this Agreement.
Notwithstanding the foregoing, no Designee shall be added or
substituted as a general partner of the Partnership if such
addition or substitution would adversely affect the Limited
Partners or the Partnership. Except as required by applicable
law, changes in the partners, members, directors or officers of
the General Partner shall not require the consent of the Limited
Partners and shall not dissolve the Partnership.
Section 12.3. Withdrawal of
General Partner. The General Partner may withdraw from the
Partnership at any time by giving one year’s prior written
notice to the Board.
Section 12.4. General
Partner as Limited Partner. The General Partner shall also
be a Limited Partner to the extent that it holds Units, and to
such extent shall be treated in all respects as a Limited
Partner.
ARTICLE XIII.
MERGER
Section 13.1. Merger.
(a) The Partnership may merge or consolidate with or into
one or more limited partnerships formed under the Delaware Act
or other business entities pursuant to an agreement of merger or
consolidation that has been approved in the manner contemplated
by Section 17-211 of the Delaware Act.
(b) Notwithstanding anything to the contrary contained
herein, an agreement of merger or consolidation approved in
accordance with Section 17-211(b) of the Delaware Act may,
to the extent permitted by Section 17-211(g) of the
Delaware Act, (i) effect any amendment to this Agreement,
(ii) effect the adoption of a new partnership agreement for
the Partnership if it is the surviving or resulting limited
partnership in the merger or consolidation, or
(iii) provide that the partnership agreement of any other
constituent limited partnership to the merger or consolidation
(including a limited partnership formed for the purpose of
consummating the merger or consolidation) shall be the
partnership agreement of the surviving or resulting limited
partnership.
ARTICLE XIV.
POWER OF ATTORNEY
Section 14.1. Grant of
Power of Attorney.
(a) Each Limited Partner, by its execution of this
Agreement (or a subscription agreement if applicable) hereby
irrevocably makes, constitutes and appoints each of the General
Partner, the Directors and Officers and the Adviser as such
Limited Partner’s true and lawful agent and
attorney-in-fact, with full power of substitution and full power
and authority in its name, place and stead, acting singly, to
make, execute, sign,
30
acknowledge, swear to, record and file the following documents
and instruments in accordance with the other provisions of this
Agreement: (i) this Agreement and a Certificate of Limited
Partnership, a Certificate of Doing Business Under Fictitious
Name and any other instrument or filing which the Board or the
Officers of the Partnership consider necessary or desirable to
carry out the purposes of this Agreement or the business of the
Partnership or that may be required under the laws of any state
or local government, or of any other jurisdiction; (ii) all
certificates required or desirable in connection with
distributions by the Partnership to the Limited Partners and
other certificates and instruments deemed advisable by any
Director or officer of the Partnership or the Adviser to carry
out the provisions of this Agreement and any applicable law;
(iii) any and all amendments, restatements, cancellations,
or modifications of the instruments described in paragraph
(i) above; (iv) any and all instruments related to the
admission, removal, or withdrawal of any Limited Partner;
(v) all documents and instruments that may be necessary or
appropriate to effect the dissolution and termination of the
Partnership, pursuant to the terms hereof; (vi) all
conveyances and other instruments or papers deemed advisable by
the Board, including those to effect a termination of the
Partnership and those to effect a Permitted Transfer of all or a
part of such Limited Partner’s Interest, or a repurchase of
all or part of such Limited Partner’s Interest; and
(vii) all other instruments, documents or papers which may
be required or permitted by law to be filed on behalf of the
Board or the Partnership and which are of a ministerial or
administrative nature.
(b) The foregoing power of attorney is a special power of
attorney and is coupled with an interest in favor of each of the
General Partner, the Directors and Officers and the Adviser and
as such shall be irrevocable and continue in full force and
effect notwithstanding the subsequent death or incapacity of any
party granting this power of attorney, regardless of whether the
General Partner, the Partnership, its Directors or Officers or
the Adviser have had notice thereof, and shall survive the
delivery of a Transfer by a Limited Partner of the whole or any
portion of such Limited Partner’s Interest, except that
where the transferee has been approved by the Board or Adviser
for admission to the Partnership as a substituted Limited
Partner, this power of attorney given by the transferor shall
survive the delivery of such assignment for the sole purpose of
enabling the Directors or Officers or the Adviser to execute,
acknowledge and file any instrument necessary to effect such
substitution.
(c) Each Limited Partner is aware that the terms of this
Agreement permit certain amendments to this Agreement to be
effected and certain other actions to be taken or omitted by or
with respect to the Partnership without such Limited
Partner’s consent. If an amendment to the Certificate of
Limited Partnership or this Agreement or any other action by or
with respect to the Partnership is taken in the manner
contemplated by this Agreement, each Limited Partner agrees
that, notwithstanding any objection that such Limited Partner
may assert with respect to such amendment or action, the
attorneys in fact appointed hereby are authorized and empowered,
with full power of substitution, to exercise the authority
granted above in any manner that may be deemed necessary or
appropriate to permit such amendment to be made or action
lawfully taken or omitted. Each Limited Partner is fully aware
that each Limited Partner will rely upon the effectiveness of
this special power of attorney with a view to the orderly
administration of the Partnership.
(d) This power of attorney may be exercised either by
signing separately as attorney-in-fact for each such Limited
Partner or by a single signature acting as attorney-in-fact for
all Limited Partners.
ARTICLE XV.
GENERAL PROVISIONS
Section 15.1. Addresses and
Notices. Any notice, demand, request, report or proxy
materials required or permitted to be given or made to a Limited
Partner under this Agreement shall be in writing and shall be
deemed given or made when delivered in person or when sent by
first class United States mail or by other means of written
communication to the Limited Partner at the address described
below. Any notice, payment or report to be given or made to a
Limited Partner hereunder shall be deemed conclusively to have
been given or made, and the obligation to give such notice or
report or to make such payment shall be deemed conclusively to
have been fully satisfied, upon sending of such notice, payment
or report to the Limited Partner at the Limited Partner’s
address as shown on the records of the Partnership. An affidavit
or certificate of
31
making of any notice, payment or report in accordance with the
provisions of this Section 15.1 executed by the
Board, the Transfer Agent or the mailing organization shall be
prima facie evidence of the giving or making of such notice,
payment or report. If any notice, payment or report addressed to
a Limited Partner at the address of such Limited Partner
appearing on the books and records of the Partnership is
returned by the United States or Canadian Postal Service marked
to indicate that the United States or Canadian Postal Service is
unable to deliver it, such notice, payment or report and any
subsequent notices, payments and reports shall be deemed to have
been duly given or made without further mailing (until such time
as such Limited Partner notifies the Partnership of a change of
address) if they are available for the Limited Partner at the
principal office of the Partnership for a period of one year
from the date of the giving or making of such notice, payment or
report to the other Limited Partners. Any notice to the
Partnership shall be deemed given if received by the Partnership
at the principal office of the Partnership. The Partnership may
rely and shall be protected in relying on any notice or other
document from a Limited Partner or other Person if believed by
it to be genuine.
Section 15.2. Further
Action. The parties shall execute and deliver all documents,
provide all information and take or refrain from taking action
as may be necessary or appropriate to achieve the purposes of
this Agreement.
Section 15.3. Certificate
of Limited Partnership. On each subsequent change in the
Partnership specified in the Delaware Act, the Board shall, to
the extent required by the Delaware Act, cause to be executed
and acknowledged an amended Certificate of Limited Partnership
pursuant to the provisions of the Delaware Act, which will be
duly filed as prescribed by Delaware law, particularly the
Delaware Act.
Section 15.4. Binding
Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their heirs, executors,
administrators, successors, legal representatives and permitted
assigns.
Section 15.5. Integration.
This Agreement constitutes the entire agreement among the
parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understandings pertaining
thereto.
Section 15.6. Applicability
of 1940 Act and Registration Statement. The parties hereto
acknowledge that this Agreement is not intended to, and does
not, set forth the substantive provisions contained in the 1940
Act and the Registration Statement that affect numerous aspects
of the conduct of the Partnership’s business and of the
rights, privileges and obligations of the Limited Partners. Each
provision of this Agreement shall be subject to and interpreted
in a manner consistent with the applicable provisions of the
1940 Act and such Registration Statement.
Section 15.7. Waiver.
No failure by any party to insist upon the strict performance of
any covenant, duty, agreement or condition.
Section 15.8. Counterparts.
This Agreement may be executed in counterparts, all of which
together shall constitute an agreement binding on all the
parties hereto, notwithstanding that all such parties are not
signatories to the original or the same counterpart. Each party
shall become bound by this Agreement immediately upon affixing
its signature hereto with respect to all Units then owned and
thereafter acquired by such party.
Section 15.9. Applicable
Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Delaware, without
regard to the principles of conflicts of law, subject to the
provisions of the 1940 Act.
Section 15.10. Jurisdiction;
Jury Trial. The courts of the State of Delaware shall have
exclusive jurisdiction in any suit, action or proceeding arising
out of, or relating to, this Agreement and each Partner consents
to the exclusive jurisdiction of the courts of the State of
Delaware in any suit, action or proceeding arising out of, or
relating to, this Agreement and agrees that service of process
on such Partner may be made by registered or certified mail sent
to such Partner at the address of such Partner appearing on the
books and records of the Partnership. Each Limited Partner
waives, and agrees not to assert, by way of motion, as a
defense, or otherwise, in any such suit, action or proceeding,
any claim that it is not subject to the jurisdiction
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of, or that its property is exempt or immune from attachment or
execution by, the courts of the State of Delaware, or that the
suit, action or proceeding is brought in an inconvenient forum,
that the venue of the suit, action or proceeding is improper or
that this Agreement or the subject matter hereof may not be
enforced in or by such court. Each Limited Partner further
waives its right to a jury trial in any suit, action or
proceeding arising out of, or relating to, this Agreement. Each
Limited Partner further agrees that no punitive or consequential
damages shall be awarded in any such suit, action or proceeding.
Section 15.11. Severability.
If any provision of this Agreement is or becomes invalid,
illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein
shall not be affected thereby.
Section 15.12. Headings,
Etc. The headings in this Agreement are inserted for
convenience of reference only and shall not affect
interpretation of this Agreement. 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 or the neuter genders
shall include the masculine, the feminine and the neuter.
Section 15.13. Interpretation
and Construction. (a) If any question should arise with
respect to the operation of the Partnership, which is not
otherwise specifically provided for in this Agreement, or with
respect to the interpretation of this Agreement, the Board is
hereby authorized to make a final determination with respect to
any such question and to interpret this agreement in such a
manner as it shall deem fair and equitable, and its
determination and interpretations so made shall be final and
binding on all parties. Whenever possible, the provisions of
this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision
of this Agreement shall be unenforceable or invalid under said
applicable law, such provision shall be ineffective only to the
extent of such unenforceability or invalidity, and the remaining
provisions of this Agreement shall continue to be binding and in
full force and effect.
(b) Unless the context otherwise requires or as otherwise
specifically set forth: (i) any pronoun used in this
Agreement shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns, pronouns and verbs
shall include the plural and vice versa; (ii) references to
Articles and Sections refer to Articles and Sections of this
Agreement; (iii) the term “include” or
“includes” means include or includes, without
limitation or exception, and “including” means
including, without limitation or exception; (iv) to the
extent that the Partnership, the General Partner, the Board, any
Officer, or any other Person is required or permitted to take
any action, make any determination or provide any consent
hereunder, such action, determination or consent shall be taken,
made, provided or withheld in the Partnership’s, the
General Partner’s, the Board’s, such Officer’s,
or such Person’s, as the case may be, sole and absolute
discretion; (v) any references in this Agreement to a
statute shall be to such statute or any successor law, as
amended from time to time, and the rules regulations and orders
thereunder, as amended from time to time, and any reference
herein to a specific section or sections of a statute shall be
deemed to include a reference to any corresponding provision of
successor law(s), as amended from time to time; and
(vi) all terms that relate to accounting matters shall be
interpreted in accordance with generally accepted accounting
principles in effect in the United States.
Section 15.14. Waiver of
Partition. Except as may otherwise be provided by law in
connection with the winding up, liquidation and dissolution of
the Partnership, each Limited Partner hereby irrevocably waives
any and all rights that it may have to maintain an action for
partition of any of the Partnership’s property.
Section 15.15. Survival of
Certain Provisions. All indemnities and reimbursement
obligations made pursuant to this Agreement shall survive
dissolution and liquidation of the Partnership until the
expiration of the longest applicable statute of limitations
(including extensions and waivers) with respect to the matter
for which a party would be entitled to be indemnified or
reimbursed, as the case may be.
[Remainder of Page Intentionally Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
| KIEWIT INVESTMENT HOLDINGS INC. |
| By: | /s/ Xxxxx X. Xxxxxxx |
|
|
|
| Name: Xxxxx X. Xxxxxxx | |
| Title: Vice President | |
| KIEWIT FINANCE GROUP INC. |
| By: | /s/ Xxxxx X. Xxxxxxx |
|
|
|
| Name: Xxxxx X. Xxxxxxx | |
| Title: Vice President | |
34
