-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ucg4WXQS1FXIAdmgqeOIjnHLJR/pkcAkynpTLvGy+WLGKt1P+EwHPzwDBBcFBOGV kVZ2J+7qV3o1Ns6YShd63A== 0000898430-97-000959.txt : 19970314 0000898430-97-000959.hdr.sgml : 19970314 ACCESSION NUMBER: 0000898430-97-000959 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19970313 SROS: NASD GROUP MEMBERS: C D ASSOCIATES, L.P. GROUP MEMBERS: C D GP, LLC GROUP MEMBERS: KKR ASSOCIATES GROUP MEMBERS: KKR PARTNERS II, L.P. GROUP MEMBERS: TW ASSOCIATES LP ET AL SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: FLAGSTAR COMPANIES INC CENTRAL INDEX KEY: 0000852772 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 133487402 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-40568 FILM NUMBER: 97555649 BUSINESS ADDRESS: STREET 1: 203 E MAIN ST CITY: SPARTANBURG STATE: SC ZIP: 29319 BUSINESS PHONE: 8035978700 MAIL ADDRESS: STREET 1: 203 EAST MAINE STREET CITY: SPARTANBURG STATE: SC ZIP: 29319 FORMER COMPANY: FORMER CONFORMED NAME: TW HOLDINGS INC DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: TW ASSOCIATES LP ET AL CENTRAL INDEX KEY: 0000942928 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 9 WEST 57TH STREET CITY: NEW YORK STATE: NY ZIP: 10017 SC 13D/A 1 SCHEDULE 13D, AMENDMENT #2 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 2) FLAGSTAR COMPANIES, INC. ------------------------ (Name of Issuer) COMMON STOCK, PAR VALUE $0.50 PER SHARE --------------------------------------- (Title of Class of Securities) 873098 10 7 ----------- (CUSIP Number) Paul Raether with a copy to: TW Associates, L.P., KKR Associates, Randall C. Bassett, Esq. KKR Partners II, L.P., Latham & Watkins C D Associates, L.P. and 633 West Fifth Street, Suite 4000 C D GP, LLC Los Angeles, California 90071 c/o Kohlberg, Kravis Roberts & Co. (213) 485-1234 9 West 57th Street New York, New York 10019 (212) 750-8300 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) March 10, 1997 --------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [_]. Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). This Amendment No. 2 to Schedule 13D ("Amendment No. 2") amends the Schedule 13D dated November 16, 1992, and all amendments thereto, filed by TW Associates, L.P., KKR Partners II, L.P., KKR Associates, C D GP, LLC and C D Associates, L.P. (the "Schedule 13D"), relating to the Common Stock, par value $.50 per share (the "Common Stock"), of Flagstar Companies, Inc., a Delaware corporation and formerly known as TW Holdings, Inc. (the "Company"). ITEM 2. IDENTITY AND BACKGROUND. Item 2 to Schedule 13D is hereby amended and restated in full to read in its entirety as follows: (a) - (c) This statement is being filed jointly by (i) TW Associates, L.P., a Delaware limited partnership ("Associates"), (ii) KKR Partners II, L.P., a Delaware limited partnership ("KKR Partners II"), (iii) KKR Associates, a New York limited partnership ("KKR Associates"), (iv) C D Associates, L.P., a Delaware limited partnership ("CD Associates") and (v) C D GP, LLC, a Delaware limited liability company ("CDGP"). KKR Associates is the sole general partner of Associates and KKR Partners II. CDGP is the sole general partner of CD Associates. Associates, KKR Partners II, KKR Associates, CD Associates and CDGP are hereinafter collectively referred to as the "Reporting Persons." The agreement among the Reporting Persons relating to the joint filing of this Amendment No. 2 is attached as Exhibit 1 hereto. Messrs. Henry R. Kravis, George R. Roberts, Robert I. MacDonnell, Paul E. Raether, Michael W. Michelson, James H. Greene, Jr., Michael T. Tokarz, Edward A. Gilhuly, Perry Golkin, Clifton S. Robbins and Scott M. Stuart are the general partners of KKR Associates. Messrs. Kravis and Roberts are the managing members of CDGP. The other members of CDGP are Messrs. MacDonnell, Raether, Michelson, Greene, Tokarz, Gilhuly, Golkin, Robbins and Stuart. The principal occupation or employment of each of Messrs. Kravis and Roberts is as a managing member of KKR & Co. L.L.C. ("KKR & Co."), which is the general partner of Kohlberg Kravis Roberts & Co., L.P. ("KKR"), a private investment firm. The addresses of KKR & Co. and KKR are 9 West 57th Street, New York, New York 10019 and 2800 Sand Hill Road, Suite 200, Menlo Park, California 94025. The principal occupation or employment of each of Messrs. MacDonnell, Raether, Michelson, Greene, Tokarz, Golkin, Robbins, Stuart and Gilhuly is as a member of KKR & Co. The address of the principal business and principal office of each of the Reporting Persons is 9 West 57th Street, Suite 4200, New York, New York 10019 and 2800 Sand Hill Road, Suite 200, Menlo Park, California 94025. The business address of Messrs. Kravis, Raether, Tokarz, Golkin, Robbins and Stuart is 9 West 57th Street, Suite 4200, New York, New York, 10019; the business address of Messrs. Roberts, MacDonnell, Michelson, Greene and Gilhuly is 2800 Sand Hill Road, Suite 200, Menlo Park, California 94025. The principal businesses of Associates, KKR Partners II and KKR Associates is investing, directly or indirectly through partnerships or other entities, in the Company and other issuers. The principal businesses of CD Associates and CDGP is investing in securities of the Company and, potentially, other issuers. (d) None of the Reporting Persons, nor, to the best of their knowledge, any of the other persons named in this Item 2 has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) None of the Reporting Persons, nor, to the best of their knowledge, any of the other persons named in paragraphs (a) - (c) above has, during the last five years, been a party to a 1 civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Each of Messrs. Kravis, Roberts, MacDonnell, Raether, Michelson, Greene, Tokarz, Gilhuly, Golkin, Robbins and Stuart is a United States citizen. ITEM 5. INTEREST IN SECURITIES OF THE COMPANY. Paragraph (b) of Item 5 of Schedule 13D is hereby amended and restated in full to read as follows: Associates and KKR Partners II, acting through their sole general partner, KKR Associates, have the sole power to vote or direct the vote, and to dispose or to direct the disposition of, Associates' Stock and Partners's Stock, respectively. As a result, KKR Associates may be deemed to beneficially own any shares of Common Stock that Associates and KKR Partners II may beneficially own or be deemed to beneficially own. CD Associates, acting through its sole general partner, CDGP, has the sole power to vote or direct the vote, and to dispose or to direct the disposition of, the CD Stock. As a result, CDGP may be deemed to beneficially own any shares of Common Stock that CD Associates may beneficially own or be deemed to beneficially own. Each of Messrs. Kravis and Roberts, as general partners and members of the Executive Committee of KKR Associates and managing members of CDGP, and each of Messrs. MacDonnell, Raether, Michelson, Greene, Tokarz, Gilhuly, Golkin, Robbins and Stuart, as general partners of KKR Associates and the other members of CDGP, may be deemed to beneficially own the shares of Common Stock and (with respect to KKR Associates) Warrants of the Company that KKR Associates and CDGP, respectively, may be deemed to beneficially own. Associates disclaims beneficial ownership of the Common Stock owned by CD Associates. Neither the filing of this Amendment No. 2 to the Reporting Persons' Schedule 13D nor any of its contents shall be deemed to constitute an admission that any Reporting Person or any other person named in Item 2 above is the beneficial owner of Common Stock referred to in this paragraph for purposes of Section 13(d) of the Exchange Act or for any other purpose, and such beneficial ownership is expressly disclaimed. On March 10, 1997, Associates was admitted as the sole limited partner of CD Associates. Item 6 hereto describes certain provisions of the Amended and Restated Limited Partnership Agreement of CD Associates (the "Amended Partnership Agreement") and is incorporated by reference herein. Associates disclaims that it is the beneficial owner of the Common Stock owned by CD Associates for purposes of Section 13(d) of the Exchange Act or for any other purpose. The Reporting Persons may be deemed to be a group in relation to their respective investments in the Company. The Reporting Persons do not affirm the existence of a group. Paragraph (c) of Item 5 of Schedule 13D is hereby amended to include the following: Except as stated in paragraph (b) above, there have not been any transactions in the shares of Common Stock effected by or for the account of the Reporting Persons during the 60 days prior to the date of this Amendment No. 2. Paragraph (d) of Item 5 of Schedule 13D is hereby amended to read in its entirety as follows: Except as stated in this Item 5, to the best knowledge of the Reporting Persons, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of the shares of Common Stock and Warrants owned by Associates, KKR Partners II and CD Associates, respectively. 2 ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE COMPANY. Item 6 of Schedule 13D is hereby amended to include the following: Amended and Restated Limited Partnership Agreement of CD Associates ------------------------------------------------------------------- The Amended Partnership Agreement provides, among other things, that dividends and interest received with respect to, and proceeds from the sale or other disposition of, the Common Stock held by CD Associates would be distributed first to CDGP, as sole general partner of CD Associates, up to the amount of its cost basis, and thereafter, any and all such dividends, distributions and proceeds would be distributed to Associates as the sole limited partner of CD Associates. A copy of the Amended Partnership Agreement is filed as Exhibit 2 hereto and is incorporated by reference herein. ITEM 7. MATERIALS TO BE FILED AS EXHIBITS. 1. Joint Filing Agreement dated as of March 10, 1997. 2. Amended and Restated Limited Partnership Agreement of CD Associates, L.P., dated as of March 10, 1997. 3 SIGNATURES After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. TW ASSOCIATES, L.P. By: KKR Associates General Partner By: /s/ Paul E. Raether ------------------- Name: Paul E. Raether Title: General Partner KKR PARTNERS II, L.P. By: KKR Associates General Partner By: /s/ Paul E. Raether ------------------- Name: Paul E. Raether Title: General Partner KKR ASSOCIATES By: /s/ Paul E. Raether ------------------- Name: Paul E. Raether Title: General Partner C D ASSOCIATES, L.P. By: C D GP, LLC General Partner By: /s/ Paul E. Raether ------------------- Name: Paul E. Raether Title: Member C D GP, LLC By: /s/ Paul E. Raether ------------------- Name: Paul E. Raether Title: Member Dated: March 10, 1997 4 EXHIBIT LIST 1. Joint Filing Agreement dated as of March 10, 1997. 2. Amended and Restated Limited Partnership Agreement of CD Associates, L.P., dated as of March 10, 1997. 5 EX-1 2 JOINT FILING AGREEMENT DATED 3-10-97 Exhibit 1 --------- JOINT FILING AGREEMENT PURSUANT TO RULE 13d-1(f)(1) ---------------------------- The undersigned acknowledge and agree that the foregoing statement on Schedule 13D is filed on behalf of each of the undersigned and that all subsequent amendments to this statement on Schedule 13D shall be filed on behalf of each of the undersigned without the necessity of filing additional joint acquisition statements. The undersigned acknowledge that each shall be responsible for the timely filing of such amendments, and for the completeness and accuracy of the information concerning him or it contained therein, but shall not be responsible for the completeness and accuracy of the information concerning the other, except to the extent that it knows or has reason to believe that such information is inaccurate. Dated: March 10, 1997 TW ASSOCIATES, L.P. By: KKR Associates General Partner By: /s/ Paul E. Raether ------------------- Name: Paul E. Raether Title: General Partner KKR PARTNERS II, L.P. By: KKR Associates General Partner By: /s/ Paul E. Raether ------------------- Name: Paul E. Raether Title: General Partner KKR ASSOCIATES By: /s/ Paul E. Raether ------------------- Name: Paul E. Raether Title: General Partner 6 C D ASSOCIATES, L.P. By: C D GP, LLC General Partner By: /s/ Paul E. Raether ------------------- Name: Paul E. Raether Title: Member C D GP, LLC By: /s/ Paul E. Raether ------------------- Name: Paul E. Raether Title: Member 7 EX-2 3 AMENDED & RESTATED LIMITED PARTNERSHIP AGRMNT. Exhibit 2 --------- AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF C D ASSOCIATES, L.P. 8 TABLE OF CONTENTS
Page ---- I. DEFINITIONS..................................................... 1 1.1 "Acquisition Expenses".................................... 1 1.2 "Act"..................................................... 1 1.3 "Agreement"............................................... 1 1.4 "Basis"................................................... 1 1.5 "Certificate"............................................. 1 1.6 "Code".................................................... 1 1.7 "General Partner"......................................... 1 1.8 "Investment Account"...................................... 1 1.9 "Investment Contribution"................................. 1 1.10 "Limited Partners"........................................ 2 1.11 "Operating Capital Account"............................... 2 1.12 "Partners"................................................ 2 1.13 "Partnership"............................................. 2 1.14 "Profits and Losses"...................................... 2 1.15 "Qualified Equity Investment"............................. 2 1.16 "Realized Investment Gain"................................ 2 1.17 "Realized Investment Loss"................................ 2 1.18 "Transferred Interest".................................... 2 II. GENERAL......................................................... 2 2.1 Formation................................................. 2 2.2 Name...................................................... 2 2.3 Purpose................................................... 3 2.4 Partners.................................................. 3 2.5 Office of the Partnership................................. 3 2.6 Designated Agent for Service of Process................... 3 2.7 Representations and Warranties of Partners................ 4 2.8 Withdrawing Limited Partner............................... 4 III. TERM............................................................ 4 IV. CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS......................... 4 4.1 Capital Contributions..................................... 4 4.2 Investment Accounts; Operating Capital Account............ 4 4.3 Adjustments to Investment Accounts........................ 4 4.4 Adjustments to Operating Capital Account.................. 5 4.5 No Right of Withdrawal.................................... 5 V. DISTRIBUTIONS................................................... 5
i 5.1 Distribution of the Qualified Equity Investment........... 5 5.2 Distribution of Proceeds Resulting from Dispositions of the Qualified Equity Investment........................ 6 5.3 Distribution of Dividends or Interest from the Qualified Equity Investment............................... 6 VI. MANAGEMENT...................................................... 6 6.1 General................................................... 6 6.2 Role of Limited Partners.................................. 6 6.3 Liability of General Partner.............................. 6 6.4 Right of General Partner to Employ Persons................ 7 6.5 Partnership Expenses...................................... 7 VII. TRANSFER OF PARTNERSHIP INTERESTS; SUBSTITUTE AND ADDITIONAL LIMITED PARTNERS..................................... 7 7.1 General................................................... 7 7.2 Effect of Retirement, Withdrawal, Bankruptcy, Dissolution, Death or Incompetency of Limited Partner..... 7 7.3 Substitute Limited Partners............................... 8 7.4 Additional Partners....................................... 8 VIII. BOOKS OF ACCOUNT................................................ 8 8.1 General................................................... 8 8.2 Fiscal Year............................................... 8 8.3 Income Tax Elections...................................... 8 IX. DISSOLUTION AND TERMINATION OF THE PARTNERSHIP.................. 8 9.1 General................................................... 8 9.2 Distribution of Partnership Assets Upon Termination....... 9 X. POWER OF ATTORNEY............................................... 9 10.1 General.................................................. 9 10.2 Survival of Power of Attorney............................ 10
ii XI. MISCELLANEOUS.................................................... 10 11.1 Governing Law............................................. 10 11.2 Binding Effect............................................ 10 11.3 Amendment................................................. 10 11.4 Counterparts.............................................. 10 11.5 Entire Agreement.......................................... 10 11.6 Severability.............................................. 10 11.7 Headings; Use of Pronouns................................. 11
iii AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF C D ASSOCIATES, L.P. This AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this "Agreement") of C D ASSOCIATES, L.P. (the "Partnership") is made as of March 10, - ---------- ----------- 1997, among C D GP, LLC, a Delaware limited liability company, as general partner, Perry Golkin, as a withdrawing limited partner, and TW Associates, L.P., a Delaware limited partnership, as a limited partner. The Partnership was formed by C D GP, LLC and Perry Golkin on December 23, 1996. On December 31, 1996, the Partnership made the Qualified Equity Investment (as defined below). This amendment to and restatement of the Limited Partnership Agreement of the Partnership dated as of December 23, 1996 is being entered into for the purpose of admitting a new limited partner to the Partnership, permitting Perry Golkin to withdraw as the limited partner of the Partnership, setting forth the terms and conditions under which the parties to the Agreement will operate and otherwise continuing the business of the Partnership. I. DEFINITIONS ----------- 1.1 "Acquisition Expenses" has the meaning given in Section 4.2. -------------------- ----------- 1.2 "Act" means the Delaware Revised Uniform Limited Partnership Act --- (6 Del. C. (S) 17-101 et. seq.), as amended from time to time. --- - 1.3 "Agreement" has the meaning given in the preamble. --------- 1.4 "Basis" means, with respect to any portion of the Qualified ----- Equity Investment, the basis thereof as determined in accordance with the Code, which shall include Acquisition Expenses allocable thereto. 1.5 "Certificate" has the meaning given in Section 2.1. ----------- ----------- 1.6 "Code" means the Internal Revenue Code of 1986, as amended. ---- 1.7 "General Partner" means C D GP, LLC, a Delaware limited liability --------------- company, and any additional General Partner admitted pursuant to Section 7.4. ----------- 1.8 "Investment Account" has the meaning given in Section 4.2. ------------------ ----------- 1.9 "Investment Contribution" has the meaning given in Section 4.1. ----------------------- ----------- 1.10 "Limited Partners" means TW Associates, L.P., a Delaware limited ---------------- partnership, and any additional or substitute Limited Partner admitted pursuant to Section 7.3 or Section 7.4. ----------- ----------- 1 1.11 "Operating Capital Account" has the meaning given in Section ------------------------- ------- 4.2. 1.12 "Partners" means the General Partner and the Limited Partners. -------- 1.13 "Partnership" has the meaning given in the preamble. ----------- 1.14 "Profits and Losses" means the profits and losses of the ------------------ Partnership with respect to the Qualified Equity Investment, determined in accordance with the method of accounting used by the Partnership for federal income tax purposes, other than Realized Investment Gain, Realized Investment Loss and losses allocated pursuant to Section 4.4. ----------- 1.15 "Qualified Equity Investment" means the investment by the --------------------------- Partnership in the common stock of Flagstar Companies, Inc., and any securities received by the Partnership in exchange therefor. 1.16 "Realized Investment Gain" means the excess, if any, of the ------------------------ proceeds from the sale or exchange of all or any portion of the Qualified Equity Investment over the Basis thereof. 1.17 "Realized Investment Loss" means the deficiency, if any, of the ------------------------ proceeds from the sale or exchange of all or any portion of the Qualified Equity Investment as compared to the Basis thereof. 1.18 "Transferred Interest" has the meaning given in Section 7.1. -------------------- ----------- II. GENERAL ------- 2.1 Formation. The Partnership was formed, and is hereby continued --------- by the Partners, under the Act for the purposes and upon the terms and conditions set forth herein. The rights and liabilities of the Partners shall be as provided in the Act, except as otherwise expressly provided in this Agreement. If there is any inconsistency between any terms and conditions contained in this Agreement and any nonmandatory provisions of the Act, the terms and conditions contained in this Agreement shall govern. A certificate of limited partnership (the "Certificate") was filed on behalf of the Partnership ----------- in the office of the Secretary of State of the State of Delaware on December 23, 1996. The General Partner may execute and file any duly authorized amendments to the Certificate from time to time in a form prescribed by the Act. 2.2 Name. The name of the Partnership is C D Associates, L.P. ---- However, the Partnership may do business under such other names as the General Partner deems necessary or desirable. 2.3 Purpose. The Partnership is organized for the object and purpose ------- of making the Qualified Equity Investment, managing and disposing of such investment, sharing the profits and losses therefrom, and engaging in such activities incidental or ancillary thereto as the General Partner deems necessary or advisable. In order to carry out its purpose the Partnership is authorized to: 2 (a) acquire, own, sell, transfer, convey, assign, exchange or otherwise dispose of its interest in the Qualified Equity Investment or any other investment made by the Partnership; (b) act as a partner of any partnership organized to make equity investments; (c) borrow money, issue evidences of indebtedness and purchase, renew and dispose of letters of credit; (d) lend money; (e) make interim investments in government obligations, certificates of deposit and bankers' acceptances; (f) enter into, execute and carry out contracts and agreements and any and all other documents and agreements; (g) bring and defend actions at law or equity; (h) purchase, cancel or otherwise retire or dispose of the interest of any Partner in the Partnership pursuant to the provisions of this Agreement; and (i) do any and all other acts and things necessary or proper in furtherance of Partnership business. 2.4 Partners. From and after the date hereof, the Partnership shall -------- consist of the General Partner and the undersigned Limited Partner, together with such other Partners as may be subsequently admitted pursuant to this Agreement. No real or personal property of the Partnership shall be deemed to be owned by any Partner individually, but shall be owned by, and title shall be vested solely in, the Partnership. 2.5 Office of the Partnership. The Partnership shall maintain an ------------------------- office and principal place of business at 9 West 57th Street, New York, New York 10019, or at such other place or places as the General Partner may from time to time decide. 2.6 Designated Agent for Service of Process. The Partnership shall --------------------------------------- continuously maintain a registered office and a designated and duly qualified agent for service of process on the Partnership in the State of Delaware. 2.7 Representations and Warranties of Partners. By execution and ------------------------------------------ delivery of this Agreement, each of the Partners: (i) represents and warrants that its interest in the Partnership is intended to be and is being acquired solely for its own account for investment and not with a view to or for sale in connection with any distribution of all or any part thereof; (ii) acknowledges that it is aware that interests in the Partnership have not been registered under the Securities Act of 1933, that interests in the Partnership cannot be sold or otherwise disposed of unless they are registered thereunder or unless an exemption from such 3 registration is available and that the Partnership has no intention of so registering interests in the Partnership thereunder, and that accordingly it is able and is prepared to bear the economic risk of making its Investment Contributions contemplated hereby and to suffer a complete loss of such Investment Contributions; and (iii) represents that it is authorized and has all requisite power and authority to become a Partner, that this Agreement has been duly and validly executed by such Partner and that this Agreement constitutes a valid and binding obligation of such Partner. 2.8 Withdrawing Limited Partner. The execution of this Agreement by --------------------------- Perry Golkin, in his capacity as a withdrawing limited partner, constitutes his withdrawal as a limited partner of the Partnership. Because of such withdrawal, Perry Golkin has no further right, interest or obligation of any kind whatsoever as a limited partner of the Partnership. Any capital contribution of Perry Golkin shall be returned to him on the date of this Agreement. III. TERM ---- The existence of the Partnership commenced upon the filing of the Certificate and shall terminate on December 31, 2025, unless terminated earlier pursuant to Article IX. ---------- IV. CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS --------------------------------------- 4.1 Capital Contributions. The General Partner shall contribute to --------------------- the Partnership the amount necessary to enable the Partnership to make the Qualified Equity Investment and pay Acquisition Expenses (as defined in Section ------- 4.2). Such amount is called the "Investment Contribution." - --- ----------------------- 4.2 Investment Accounts; Operating Capital Account. There shall be ---------------------------------------------- established for each Partner on the books of the Partnership a capital account (an "Investment Account") relating to the Qualified Equity Investment. The ------------------ Investment Contribution shall be credited to the Investment Account of the General Partner. In addition, the General Partner shall have established for it a capital account (the "Operating Capital Account") to which shall be credited ------------------------- its capital contributions pursuant to Section 6.5, other than capital ----------- contributions relating to expenses incurred in connection with the acquisition of the Qualified Equity Investment and any other expenses properly added to Basis (the "Acquisition Expenses"). -------------------- 4.3 Adjustments to Investment Accounts. The Investment Accounts of ---------------------------------- Partners shall, for federal income tax purposes, be adjusted as follows: (a) any amounts distributed to the Partners pursuant to Section ------- 5.2 and Section 5.3 shall be debited against the Investment Accounts of the - --- ----------- Partners; (b) any Profits of the Partnership shall be credited to the Investment Account of the General Partner in an amount equal to the excess of the amount of any Realized Investment Losses previously charged thereto pursuant to Section 4.3(d) over the amount of any Realized Investment Gains credited -------------- thereto pursuant to Section ------- 4 4.3(c), and thereafter to the Investment Accounts of the Limited Partners; and - ------ any Losses of the Partnership shall be debited against the Investment Account of the General Partner; (c) any Realized Investment Gains shall be credited to the Investment Account of the General Partner in an amount equal to the excess of the amount of any Realized Investment Losses previously charged thereto pursuant to Section 4.3(d) over the amount of any Realized Investment Gains previously -------------- credited thereto pursuant to this Section 4.3(c), and thereafter to the -------------- Investment Accounts of the Limited Partners; (d) any Realized Investment Loss shall be debited against the Investment Account of the General Partner; and (e) the Basis of any portion of the Qualified Equity Investment distributed to the General Partner pursuant to Section 5.1 shall be debited ----------- against the Investment Account of the General Partner. 4.4 Adjustments to Operating Capital Account. All expenses or losses ---------------------------------------- incurred by the Partnership pursuant to Section 6.5, other than Acquisition ----------- Expenses, shall be debited to the Operating Capital Account for federal income tax purposes. 4.5 No Right of Withdrawal. No Partner shall have the right to ---------------------- withdraw any portion of such Partner's Investment Contribution or Investment Account, except as provided herein. V. DISTRIBUTIONS ------------- 5.1 Distribution of the Qualified Equity Investment. If the General ----------------------------------------------- Partner deems it advisable, either because the Qualified Equity Investment has attained a suitable degree of appreciation and marketability, or for any other reason, it may in its discretion distribute to Partners all or any portion of the Qualified Equity Investment. The decision of the General Partner to distribute, retain or sell all or any portion of the Qualified Equity Investment shall be binding and conclusive on all Partners. Any such distribution shall be made in the following order of priority: first, the portion of the securities to be distributed having a value up to the original cost basis of the Partnership plus Acquisition Expenses allocable to all such securities (to the extent not previously distributed to the General Partner hereunder) shall be distributed to the General Partner; and second, the remainder of such securities shall be distributed to the Limited Partners. Notwithstanding the foregoing, the General Partner may withhold making a distribution to a Partner until the Partner has provided the General Partner with all necessary information and assurances (including an opinion of counsel satisfactory to the General Partner) requested by the General Partner to determine that such distribution will be in compliance with all applicable laws. 5.2 Distribution of Proceeds Resulting from Dispositions of the ----------------------------------------------------------- Qualified Equity Investment. As soon as practicable after the receipt of any - --------------------------- proceeds from the sale, exchange or other disposition of all or any portion of the Qualified Equity Investment, the proceeds, net of any expenses, shall be distributed to the Partners in the following order of priority: first, an amount up to the original cost basis of the Partnership plus Acquisition 5 Expenses allocable to such investment (to the extent not previously distributed to the General Partner hereunder) shall be distributed to the General Partner; and second, the remaining amount shall be distributed to the Limited Partners. 5.3 Distribution of Dividends or Interest from the Qualified Equity --------------------------------------------------------------- Investment. As soon as practicable after receipt thereof, any dividends or - ---------- interest received by the Partnership with respect to any Qualified Equity Investment shall be distributed to the Partners in the following order of priority: first, an amount up to the original cost basis of the Partnership plus Acquisition Expenses allocable to such investment (to the extent not previously distributed to the General Partner hereunder) shall be distributed to the General Partner; and second, the remaining amount shall be distributed to the Limited Partners. VI. MANAGEMENT ---------- 6.1 General. The General Partner may act for and bind the ------- Partnership. The General Partner shall have the authority, inter alia, to make distributions and sell assets of the Partnership, and shall have the exclusive right to manage the business and affairs of the Partnership, and shall delegate such management duties and responsibilities to such other person or persons designated by it as it may determine (including, without limitation, affiliates of the General Partner). 6.2 Role of Limited Partners. No Limited Partner shall have any ------------------------ right to participate in the management of the business of the Partnership or act for or bind the Partnership. 6.3 Liability of General Partner. The General Partner shall not be ---------------------------- liable to the Partnership or any other Partner for any action taken or omitted to be taken in good faith and with the belief that such action or omission was in the best interest of the Partnership, so long as such action or omission was not in violation of the provisions hereof and did not constitute fraud or gross negligence by the General Partner. The General Partner shall not be liable to the Partnership or any other Partner for any action taken or omitted to be taken by any other Partner, nor shall the General Partner (in the absence of fraud or gross negligence by the General Partner) be liable to the Partnership or any other Partner for any action or any omission of any employee or agent of the Partnership. The Partnership shall, to the full extent permitted by applicable law, indemnify and hold harmless the General Partner against liabilities incurred by it in connection with any action, suit or proceeding to which it may be made a party or otherwise involved or with which it shall be threatened by reason of its being a General Partner of the Partnership or while acting as General Partner on behalf of the Partnership or in its interest; provided that the foregoing indemnification shall not include or apply to any liability arising by reason of any act or omission of the General Partner which has been finally determined by a court of competent jurisdiction to have been grossly negligent or fraudulent. 6.4 Right of General Partner to Employ Persons. The General Partner ------------------------------------------ may employ, on behalf of the Partnership, such persons, firms or corporations (including accountants and attorneys) as it deems advisable for the conduct of the business of the Partnership, on such terms and for such compensation as the General Partner may determine. 6 6.5 Partnership Expenses. The General Partner shall contribute all -------------------- sums necessary to pay the expenses of the Partnership, both for routine and recurring costs and for extraordinary items. VII. TRANSFER OF PARTNERSHIP INTERESTS; SUBSTITUTE AND ADDITIONAL LIMITED -------------------------------------------------------------------- PARTNERS -------- 7.1 General. No Partner may sell, transfer, assign, hypothecate, ------- pledge or otherwise dispose of or encumber all or any part of such Partner's interest in the Partnership (whether voluntarily, involuntarily or by operation of law) without the prior written consent of the General Partner, which consent may be given or withheld in the General Partner's sole and absolute discretion; provided, however, that any Partner may transfer or assign all or any portion of its interest in the Partnership to any member of its family (including a trust for the benefit of such family members or a partnership of which such family members are partners), by gift, will or intestate succession, or by a transfer involving the receipt of value in exchange therefor. Upon any permitted transfer, the assignee shall succeed to such portion of the transferring Partner's Investment Account and Investment Contribution and Operating Capital Account (if applicable) as the transferring Partner shall provide by written notice to the Partnership (collectively, the "Transferred Interest"). No -------------------- assignee shall have the right to become a General Partner of the Partnership, but an assignee of the interest of a General Partner or a Limited Partner may be admitted as a substitute Limited Partner pursuant to Section 7.3. Except as ----------- specifically provided otherwise in this Agreement, no Limited Partner shall have the right to withdraw from the Partnership without the General Partner's consent, which consent may be given or withheld in the General Partner's sole and absolute discretion. 7.2 Effect of Retirement, Withdrawal, Bankruptcy, Dissolution, Death ---------------------------------------------------------------- or Incompetency of Limited Partner. The retirement, withdrawal, bankruptcy, - ---------------------------------- dissolution, death or adjudication of incompetency of a Limited Partner shall not dissolve the Partnership. The trustee, executor, administrator, committee or guardian of the Limited Partner or of the Limited Partner's estate, as the case may be, shall have all the rights of the Limited Partner for the purpose of settling or managing the estate and such power as the bankrupt, deceased or incompetent Limited Partner possessed to assign all or part of the Limited Partner's interest in the Partnership. 7.3 Substitute Limited Partners. No assignee of all or any part of --------------------------- an interest of a Partner in the Partnership shall be admitted to the Partnership as a substitute Limited Partner unless (a) the General Partner in its sole and absolute discretion has consented in writing to such admission, (b) the assignee has executed a counterpart of this Agreement (as modified or amended from time to time) and such other instruments as the General Partner deems necessary to confirm the undertaking of the assignee to be bound by all the terms and provisions of this Agreement and (c) the assignee undertakes to pay all expenses incurred by the Partnership in connection with such assignment and substitution. 7.4 Additional Partners. Any person may be admitted to the ------------------- Partnership as an additional Partner if (a) the General Partner in its sole and absolute discretion has consented in writing to the admission and (b) the person has executed a counterpart of this 7 Agreement (as modified or amended from time to time) and such other instruments as the General Partner deems necessary to confirm the undertaking of the person to be bound by all the terms and provisions of this Agreement. VIII. BOOKS OF ACCOUNT ---------------- 8.1 General. Full and accurate books of account, in which shall be ------- entered each and every transaction of the Partnership, shall be kept by the Partnership at an office of the Partnership (or at such other place as the General Partner shall advise the Partners in writing). These books shall be kept on a cash basis as employed for purposes of federal income taxation. Such books shall, at all reasonable times, be open to inspection and copying by the General Partner or its authorized agents, servants and employees. A report showing the financial condition of the Partnership at the end of each fiscal year of the Partnership and the results of its operations for the fiscal year shall be mailed to each Partner within 120 days after the end of the fiscal year. 8.2 Fiscal Year. Except as the General Partner may otherwise ----------- determine, the fiscal year of the Partnership shall be the calendar year. 8.3 Income Tax Elections. The General Partner may make any income -------------------- tax elections for the Partnership which it deems necessary or advisable, including the election pursuant to Section 754 of the Code. IX. DISSOLUTION AND TERMINATION OF THE PARTNERSHIP ---------------------------------------------- 9.1 General. The Partnership shall be dissolved and its affairs ------- wound up only upon the first to occur of the following: (a) a determination by the General Partner to dissolve the Partnership; (b) December 31, 2025; (c) judicial dissolution; or (d) the death, dissolution, withdrawal or Bankruptcy (as defined below) of the General Partner. For purposes of this Section 9.1(d), -------------- "Bankruptcy" means the occurrence of any of the events specified in Section 17- ---------- 402(a)(4) or (5) of the Act with respect to the General Partner. 9.2 Distribution of Partnership Assets Upon Termination. Upon the --------------------------------------------------- dissolution of the Partnership in accordance with this Agreement and the Act, the General Partner shall act as liquidator of the Partnership's assets or, if the General Partner is not still functioning, the remaining members of the General Partner shall act as liquidators of the Partnership's assets. All liquidating distributions shall be made in assets of the Partnership and/or in cash, as the liquidator(s) shall determine in their sole discretion. In connection with the sale by the Partnership and reduction to cash of any of its assets, any Partner (or 8 affiliate thereof) may bid for and purchase any such assets. The liquidator(s) shall apply or distribute the assets of the Partnership in one or more installments as follows: (a) First, to the payment of the Partnership's outstanding liabilities to creditors, in the order of priority as provided by law, or the provision of adequate reserves therefor; (b) Second, to the General Partner in the amount of the positive balance in its Investment Account (which shall be adjusted to reflect the profit or loss arising from such liquidation); and (c) Third, the remainder to the Limited Partners. X. POWER OF ATTORNEY ----------------- 10.1 General. Each Limited Partner irrevocably constitutes and ------- appoints the General Partner (and each additional General Partner, if any) its true and lawful attorney, in its name, place and stead, to make, execute, acknowledge and/or file: (a) the Certificate; (b) all documents and instruments which may be deemed necessary or desirable to effect the winding-up and termination of the Partnership (including but not limited to a certificate of cancellation of the Certificate); (c) any documents which may be required to effect transfers of Partnership interests; (d) any and all amendments to this Agreement and the Certificate necessary to substitute or add Partners, to reflect adjustments in interests in the Partnership or to make other required changes; and (e) any business certificate, fictitious name certificate, amendment thereto or other instrument or document of any kind necessary or, in the opinion of the General Partner, advisable to accomplish the purpose of the Partnership or required by applicable federal, state or local law; it being expressly intended by each of the Partners that the foregoing power of attorney is coupled with an interest. 10.2 Survival of Power of Attorney. The power of attorney set forth ----------------------------- in Section 10.1 shall survive (a) the death, insanity or incapacity of a Partner ------------ and (b) any assignment or other transfer (voluntary or involuntary) by a Partner of all or any part of its interest in the Partnership. 9 XI. MISCELLANEOUS ------------- 11.1 Governing Law. This Agreement shall be governed by, and ------------- construed in accordance with, the laws of Delaware applicable to contracts made and to be performed therein without giving effect to any otherwise governing principles of conflicts of law. 11.2 Binding Effect. This Agreement shall be binding upon and shall -------------- inure to the benefit of the parties hereto and their respective permitted successors, assigns, legal representatives, heirs and distributees. Nothing in this Agreement, express or implied, is intended or shall be construed to give any person other than the parties to this Agreement (or their respective permitted successors, assigns, legal representatives, heirs and distributees) any legal or equitable right, remedy or claim under or in respect of any agreement or provision contained herein, it being the intention of the parties hereto that this Agreement is for the sole and exclusive benefit of such parties (or such permitted successors, assigns, legal representatives, heirs and distributees) and for the benefit of no other person. 11.3 Amendment. This Agreement may only be amended by a writing duly --------- signed by the General Partner, except that any such amendment which directly and materially adversely affects the Limited Partners shall require the consent of the Limited Partners. 11.4 Counterparts. This Agreement may be executed in any number of ------------ counterparts, and each such counterpart shall for all purposes be deemed an original, and all such counterparts shall together constitute but one and the same agreement. 11.5 Entire Agreement. This Agreement constitutes the entire ---------------- agreement among the Partners and supersedes all prior agreements and understandings among the Partners with respect to the matters contemplated hereby. There are no restrictions, warranties, covenants, agreements, promises or undertakings other than those expressly set forth in this Agreement. 11.6 Severability. If at any time subsequent to the date hereof, any ------------ provision of this Agreement shall be held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision shall be of no force and effect, but the illegality or unenforceability of such provision shall have no effect upon and shall not impair the enforceability of any other provision of this Agreement. 11.7 Headings; Use of Pronouns. Headings and captions are used herein ------------------------- for convenience only and do not form a part of this Agreement. Where context requires, the terms "it" and "its" are used to refer to both individuals and entities. 10 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. GENERAL PARTNER: LIMITED PARTNER: - --------------- --------------- C D GP, LLC TW ASSOCIATES, L.P. By: KKR Associates, L.P., its General Partner By: /s/ Henry R. Kravis ________________________ Henry R. Kravis Manager By: /s/ Paul Raether ________________________ General Partner By: /s/ George R. Roberts ________________________ George R. Roberts Manager WITHDRAWING LIMITED PARTNER /s/ Perry Golkin __________________________________ Perry Golkin S-1 -----END PRIVACY-ENHANCED MESSAGE-----