UNITED STATES
Securities and Exchange Commission
Washington, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report - March 6, 2001
(Date of earliest event reported: August 31, 2000)
EL PASO ENERGY PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
Delaware 1-11680 76-0396023
(State or other jurisdiction (Commission File Number)(I.R.S. Employer
of incorporation) Identification Number)
El Paso Building
1001 Louisiana Street
Houston, Texas 77002
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (713) 420-2131
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit No. Description
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3.B Second Amended and Restated Agreement of Limited
Partnership effective as of August 31, 2000.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
Date: March 6, 2001 EL PASO ENERGY PARTNERS, L.P.
By: /s/ D. Mark Leland
---------------------------------
D. Mark Leland
Sr. Vice President and
Controller
(Chief Accounting Officer)
Exhibit Index
Exhibit No. Description
- ----------- ------------
3.B Second Amended and Restated Agreement of Limited
Partnership effective as of August 31, 2000.
EXHIBIT 3.B
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF EL PASO ENERGY PARTNERS, L.P.
Amended and Restated effective as of
August 31, 2000
TABLE OF CONTENTS
Page
ARTICLE I Organizational Matters 1
1.1 Formation 1
1.2 Name 1
1.3 Registered Office; Principal Office 2
1.4 Power of Attorney. 2
1.5 Term 4
1.6 Possible Restrictions on Transfer 4
ARTICLE II Definitions 5
ARTICLE III Purpose 20
3.1 Purpose and Business 20
3.2 Powers 20
ARTICLE IV Capital Contributions 20
4.1 Initial Contributions 20
4.2 Return of Initial Contributions 21
4.3 Contribution by the General Partner and the
Initial Limited Partner. 21
4.4 Issuance of Additional Units and Other
Securities. 21
4.5 Limited Preemptive Rights 24
4.6 Capital Accounts. 24
4.7 Interest 26
4.8 No Withdrawal 26
4.9 Loans from Partners 26
4.10 No Fractional Units 26
4.11 Partnership Interest Adjusting Events. 26
ARTICLE V Allocations and Distributions 27
5.1 Allocations for Capital Account Purposes 27
5.2 Allocations for Tax Purposes. 36
5.3 Requirement and Characterization of
Distributions 38
5.4 Distributions During Series A Preference Unit
Preference Period 39
5.5 Distributions With Respect to Calendar
Quarters After the Series A Preference Unit
Preference Period. 40
5.6 Conversion of Series A Preference Units. 44
5.7 Distributions of Cash from Interim Capital
Transactions 45
5.8 Definitions 45
5.9 Adjustments to Minimum Quarterly Distribution
Levels, Target Levels, Unrecovered Capital,
Series B Preference Unit Amounts and Certain
Other Provisions. 50
5.10 Reserve Amount 50
5.11 Special Distributions. 51
ARTICLE VI Management And Operation Of Business 51
6.1 Management. 51
6.2 Certificate of Limited Partnership 53
6.3 Restrictions on General Partner's Authority. 53
6.4 Reimbursement of the General Partner. 54
6.5 Outside Activities. 55
6.6 Loans to and from the General Partner;
Contracts with Affiliates. 56
6.7 Indemnification. 57
6.8 Liability of Indemnitees. 59
6.9 Resolution of Conflict of Interest. 59
6.10 Other Matters Concerning the General Partner. 61
6.11 Title to Partnership Assets 61
6.12 Purchase or Sale of Preference Units 62
6.13 Reliance by Third Parties 62
6.14 Registration Rights of the General Partner
and its Affiliates. 62
ARTICLE VII Rights And Obligations Of Limited Partners 64
7.1 Limitation of Liability 64
7.2 Management of Business 64
7.3 Outside Activities 65
7.4 Return of Capital 65
7.5 Rights of Limited Partner Relating to the
Partnership. 65
ARTICLE VIII Book, Records, Accounting and Reports 66
8.1 Records and Accounting 66
8.2 Fiscal Year 66
8.3 Reports. 66
ARTICLE IX Tax Matters 67
9.1 Preparation of Tax Return 67
9.2 Tax Elections 67
9.3 Tax Controversies 67
9.4 Organizational Expenses 67
9.5 Withholding 67
9.6 Entity-Level Taxation 68
9.7 Entity-Level Deficiency Collections 68
9.8 Opinions of Counsel 68
ARTICLE X Unit Certificate 69
10.1 Unit Certificates 69
10.2 Registration, Registration of Transfer and
Exchange. 69
10.3 Mutilated, Destroyed, Lost or Stolen
Certificates. 69
10.4 Record Holder 70
ARTICLE XI Transfer of Interests 71
11.1 Transfer. 71
11.2 Transfer of General Partner's Partnership
Interest. 71
11.3 Transfer of Units. 72
11.4 Restrictions on Transfers 72
11.5 Citizenship Certificates; Non-citizen
Assignees. 72
11.6 Redemption of Interests. 73
ARTICLE XII Admission of Partners 75
12.1 Admission of Initial Limited Partners 75
12.2 Admission of Substituted Limited Partners 75
12.3 Admission of Successor General Partner 76
12.4 Admission of Additional Limited Partners. 76
12.5 Amendment of Agreement and Certificate of
Limited Partnership 76
ARTICLE XIII Withdrawal or Removal of Partners 76
13.1 Withdrawal of the General Partner. 76
13.2 Removal of the General Partner 78
13.3 Interest of Departing Partner and Successor
General Partner. 78
13.4 Withdrawal of Limited Partners 80
ARTICLE XIV Dissolution and Liquidation 80
14.1 Dissolution 80
14.2 Continuation of the Business of the
Partnership after Dissolution 80
14.3 Liquidation 81
14.4 Distributions in Kind. 82
14.5 Cancellation of Certificate of Limited
Partnership 83
14.6 Reasonable Time for Winding Up 83
14.7 Return of Capital 83
14.8 Capital Account Restoration 83
14.9 Waiver of Partition 83
ARTICLE XV Amendment of Partnership Agreement; Meetings;
Record Date 83
15.1 Amendments to be Adopted Solely by General
Partner 83
15.2 Amendment Procedures 84
15.3 Amendment Requirement. 85
15.4 Meetings 86
15.5 Notice of a Meeting 86
15.6 Record Date 86
15.7 Adjournment 86
15.8 Waiver of Notice; Approval of Meeting;
Approval of Minutes 86
15.9 Quorum 87
15.10 Conduct of Meeting 87
15.11 Action Without a Meeting 88
15.12 Voting and Other Rights 88
ARTICLE XVI Merger 89
16.1 Authority 89
16.2 Procedure for Merger or Consolidation 89
16.3 Approval by Limited Partner of Merger or
Consolidation. 90
16.4 Certificate of Merger 90
16.5 Effect of Merger. 90
ARTICLE XVII Right to Acquire Units 91
17.1 Right to Redeem Preference Units. 91
17.2 Right to Acquire Units 92
17.3 Notice of Election to Redeem or Acquire
Units. 92
17.4 Surrender of Unit Certificates 94
ARTICLE XVIII General Provisions 94
18.1 Addresses and Notices 94
18.2 Titles and Captions 95
18.3 Pronouns and Plurals 95
18.4 Further Action 95
18.5 Binding Effect 95
18.6 Integration 95
18.7 Creditors 95
18.8 Waiver 95
18.9 Counterparts 95
18.10 Applicable Law 96
18.11 Invalidity of Provisions 96
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
EL PASO ENERGY PARTNERS, L.P.
This Second Amended and Restated Agreement of Limited
Partnership of El Paso Energy Partners, L.P., as Amended and
Restated effective as of August 31, 2000, is entered into by and
among El Paso Energy Partners Company, a Delaware corporation, as
the General Partner, and the Limited Partners, together with any
other Persons who become Partners in the Partnership as provided
herein. In consideration of the covenants, conditions and
agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
Organizational Matters
1.1 Formation
. The General Partner and the Organizational Limited Partner
have previously formed this Partnership as a limited partnership
pursuant to the provisions of the Delaware Act. The General
Partner and the Organizational Limited Partner amended and
restated the original Agreement of Limited Partnership of El Paso
Energy Partners, L.P. (formerly known as Leviathan Gas Pipeline
Partners, L.P.) in its entirety by entering into the Amended and
Restated Agreement of Limited Partnership dated as of February
19, 1993 (the "February 1993 Partnership Agreement"). The
February 1993 Partnership Agreement was amended by: Amendment No.
1 dated December 31, 1996, which effected a split of the then
outstanding Units; Amendment No. 2 dated June 1, 1999, which
lowered the percentage of outstanding Units necessary to remove
the General Partner in connection with the Partnership's
acquisition from El Paso Energy Corporation an additional
interest in Viosca Knoll Gathering Company; and Amendment No. 3
dated November 30, 1999, which dealt with the change in the
Partnership's and the General Partner's names. The General
Partner and the Limited Partners hereby amend and restate, and
replace in its entirety, the February 1993 Partnership Agreement,
as amended prior to the Second Restatement Date, with this Second
Amended and Restated Agreement of Limited Partnership of El Paso
Energy Partners, L.P. The changes effected by this second
amendment and restatement include: (i) incorporating the changes
made by Amendments No. 1-3 to the February 1993 Partnership
Agreement; (ii) authorizing and issuing the Series B Preference
Units in connection with the Partnership's acquisition of the
Crystal storage facilities; and (iii) making certain corrections
and clarifications. Subject to the provisions of this Agreement,
the General Partner and the Limited Partners hereby continue the
Partnership as a limited partnership pursuant to the provisions
of the Delaware Act. Except as expressly provided to the
contrary in this Agreement, the rights and obligations of the
Partners and the administration, dissolution and termination of
the Partnership shall be governed by the Delaware Act. The
Partnership Interest of each Partner shall be personal property
for all purposes.
1.2 Name
. The name of the Partnership shall be "El Paso Energy Partners,
L.P." (formerly known as Leviathan Gas Pipeline Partners, L.P.).
The Partnership's business may be conducted under any other name
or names deemed necessary or appropriate by the General Partner,
including, without limitation, the name of the General Partner or
any Affiliate thereof. The words "Limited Partnership," "L.P.,"
"Ltd." or similar words or letters shall be included in the
Partnership's name where necessary for the purposes of complying
with the laws of any jurisdiction that so requires. The General
Partner in its sole discretion may change the name of the
Partnership at any time and from time to time and shall notify
the Limited Partners of such change in the next regular
communication to Limited Partners.
1.3 Registered Office; Principal Office
. Unless and until changed by the General Partner, the
registered office of the Partnership in the State of Delaware
shall be located at Corporation Trust Center, 1209 Orange Street,
Wilmington, New Castle County, Delaware 19801, 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. The principal office of the Partnership and the address
of the General Partner shall be the El Paso Building, 1001
Louisiana Street, Houston, Texas 77002, or such other place as
the General Partner may from time to time designate by notice to
the Limited Partners. The Partnership may maintain offices at
such other place or places within or outside the State of
Delaware as the General Partner deems advisable.
1.4 Power of Attorney.
(a) Each Limited Partner and each Assignee hereby constitutes
and appoints each of the General Partner and, if a Liquidator
shall have been selected pursuant to Section 14.3, the Liquidator
severally (and any successor to either thereof by merger,
transfer, assignment, election or otherwise) and each of their
respective authorized officers and attorneys-in-fact with full
power of substitution, as his true and lawful agent and attorney-
in-fact with full power and authority in his name, place and
stead to:
(i) execute, swear to, acknowledge, deliver, file and record in
the appropriate public offices (A) all certificates, documents
and other instruments (including, without limitation, this
Agreement and the Certificate of Limited Partnership and all
amendments or restatements thereof) that the General Partner or
the Liquidator deems necessary or appropriate to form, qualify or
continue the existence or qualification of the Partnership as a
limited partnership (or a partnership in which the limited
partners have limited liability) in the State of Delaware and in
all other jurisdictions in which the Partnership may conduct
business or own property, (B) all certificates, documents and
other instruments that the General Partner or the Liquidator
deems necessary or appropriate to reflect, in accordance with its
terms, any amendment, change, modification or restatement of this
Agreement, (C) all certificates, documents and other instruments
(including, without limitation, conveyances and a certificate of
cancellation) that the General Partner or the Liquidator deems
necessary or appropriate to reflect the dissolution and
liquidation of the Partnership pursuant to the terms of this
Agreement, (D) all certificates, documents and other instruments
relating to the admission, withdrawal, removal or substitution of
any Partner pursuant to, or other events described in, Article
XI, XII, XIII or XIV or the Capital Contribution of any Partner,
(E) all certificates, documents and other instruments relating to
the determination of the rights, preferences and privileges of
any class or series of Units or other securities issued pursuant
to Section 4.4 and (F) all certificates documents and other
instruments (including, without limitation, agreements and a
certificate of merger) relating to a merger or consolidation of
the Partnership pursuant to Article XVI;
(ii) execute, swear to, acknowledge, deliver, file and record all
ballots, consents, approval waivers, certificates and other
instruments necessary or appropriate, in the sole discretion of
the General Partner or the Liquidator, to make, evidence, give,
confirm or ratify any vote, consent, approval, agreement or other
action that is made or given by the Partners hereunder or is
consistent with the terms of this Agreement or is necessary or
appropriate, in the sole discretion of the General Partner or the
Liquidator, to effectuate the terms or intent of this Agreement,
provided, that when required by Section 15.3 or any other
provision of this Agreement that establishes a percentage of the
Limited Partners or of the Limited Partners of any class or
series required to take any action, the General Partner or the
Liquidator may exercise the power of attorney made in this
Section 1.4(a)(ii) only after the necessary vote, consent or
approval of the Limited Partners or of the Limited Partners of
such class or series;
(iii) sign, execute and file with the Department of Interior
(including any bureau, office or other unit thereof, whether in
Washington, D.C., or in the field, or any officer or employee
thereof), as well as with any other federal or state agencies,
departments, bureaus, offices or authorities, any documents or
instruments related to the Partnership or its business which the
General Partner in its sole discretion determines should be
filed, including, without limitation, (A) any and all offers to
lease and leases of or with respect to (including amendments,
modifications, supplements, renewals and exchanges thereof) any
lands under the jurisdiction of the United States or any state
(including, without limitation, lands within the public domain,
acquired lands and Indian lands) under any act or regulation
which provides for the leasing thereof; (B) all statements of
interest and holdings on behalf of the Partnership or the
Partners; (C) any other statements, notices or communications now
or hereafter required or permitted to be filed under any law,
rule or regulation of the United States or any state, including,
without limitation, the Minerals Land Leasing Act of 1920, as
amended, 30 U.S.C. 181 et seq., the Mineral Leasing Act for
Acquired Lands of 1947, as amended, 30 U.S.C. 351 et seq., the
Right-of-Way Leasing Act of 1930, 30 U.S.C. 301 et seq., and the
Outer Continental Shelf Lands Act of 1953, 43 U.S.C. 1331 et
seq., relating to the leasing of lands for oil and gas
exploration or development; and (D) any request for approval of
assignments or transfers of oil and gas leases, any utilization
or pooling agreements and any other documents relating to lands
under the jurisdiction of the United States or any state;
Nothing contained in this Section 1.4(a) shall be construed as
authorizing the General Partner to amend this Agreement except in
accordance with Article XV, or as may be otherwise expressly
provided for in this Agreement.
(b) The foregoing power of attorney is hereby declared to be
irrevocable and a power coupled with an interest and it shall
survive and not be affected by the subsequent death,
incompetency, disability, incapacity, dissolution, bankruptcy or
termination of any Limited Partner or Assignee and the transfer
of all or any portion of such Limited Partner's or Assignee's
Partnership Interest and shall extend to such Limited Partners or
Assignee's heirs, successors, assigns and personal
representatives. Each such Limited Partner or Assignee hereby
agrees to be bound by any representation made by the General
Partner or the Liquidator acting in good faith pursuant to such
power of attorney; and each such Limited Partner or Assignee
hereby waives any and all defenses that may be available to
contest, negate or disaffirm the action of the General Partner or
the Liquidator taken in good faith under such power of attorney.
Each Limited Partner or Assignee shall execute and deliver to the
General Partner or the Liquidator, within 15 days after receipt
of the General Partner's or the Liquidator's request therefor,
such further designations, powers of attorney and other
instruments as the General Partner or the Liquidator deems
necessary to effectuate this Agreement and the purposes of the
Partnership.
1.5 Term
. The Partnership commenced upon the filing of the Certificate
of Limited Partnership in accordance with the Delaware Act and
shall continue in existence until the close of Partnership
business on December 31, 2043, or until the earlier termination
of the Partnership in accordance with the provisions of Article
XIV.
1.6 Possible Restrictions on Transfer
. Notwithstanding anything to the contrary contained in this
Agreement, in the event of (i) the enactment (or imminent
enactment) of any legislation, (ii) the publication of any
temporary or final regulation by the Treasury Department
("Treasury Regulation"), (iii) any ruling by the Internal Revenue
Service or (iv) any judicial decision that in any such case, in
the Opinion of Counsel, would result in the taxation of the
Partnership for federal income tax purposes as a corporation or
would otherwise subject the Partnership to being taxed as an
entity for federal income tax purposes, then, either (a) the
General Partner may impose such restrictions on the transfer of
Units or Partnership Interests as may be required in the Opinion
of Counsel to prevent the Partnership from being taxed as a
corporation or otherwise being taxed as an entity for federal
income tax purposes, including, without limitation, making any
amendments to this Agreement as the General Partner in its sole
discretion may determine to be necessary or appropriate to impose
such restrictions, provided, that any such amendment to this
Agreement that would result in the delisting or suspension of
trading of any class or series of Units or other Partnership
Securities on any National Securities Exchange or national
securities market on which such class or series of Units or other
Partnership Securities are then traded must be approved by the
holders of at least 66 2/3% of the Outstanding securities of such
class or series or (b) upon the recommendation of the General
Partner and the approval of the holders of at least 66 2/3% of
all Outstanding Voting Units, the Partnership may be converted
into and reconstituted as a trust or any other type of legal
entity (the "New Entity") in the manner and on other terms so
recommended and approved. In such event, the business of the
Partnership shall be continued by the New Entity and the
Outstanding Units and other Partnership Securities shall be
converted into equity interests of the New Entity in the manner
and on the terms so recommended and approved. Notwithstanding
the foregoing, no such reconstitution shall take place unless the
Partnership shall have received an Opinion of Counsel to the
effect that the liability of the Limited Partners for the debts
and obligations of the New Entity shall not, unless such Limited
Partners take part in the control of the business of the New
Entity, exceed that which otherwise had been applicable to such
Limited Partners as limited partners of the Partnership under the
Delaware Act.
1.7 Series A Common Unit Terminology
. For the avoidance of confusion, the Units referred to herein
as "Series A Common Units" are the Units referred to in the
February 1993 Partnership Agreement as "Common Units." The Units
referred to herein as "Series A Common Units" shall be referred
to publicly, and shall be reflected on the relevant Unit
certificate, as "Common Units" until such time (which time may or
may not occur) as the Partnership authorizes and issues a second
class or series of Common Units.
ARTICLE II
Definitions
The following definitions shall, for all purposes, unless
otherwise clearly indicated to the contrary, be applied to the
terms used in this Agreement:
"1996 Split Date" means December 31, 1996.
"Additional Limited Partner" means a Person admitted to the
Partnership as a Limited Partner pursuant to Section 12.4 and who
is shown as such on the books and records of the Partnership.
"Adjusted Capital Account" means the Capital Account
maintained for each Partner as of the end of each taxable year of
the Partnership, (a) increased by any amounts that such Partner
is obligated to restore under the standards set by Treasury
Regulation Section 1.704-1(b)(2)(ii)(c) (or is deemed obligated
to restore under Treasury Regulation Sections 1.704-2(g)(1) and
1.704-2(i)(5)), and (b) decreased by (i) the amount of all losses
and deductions that as of the end of such taxable year, are
reasonably expected to be allocated to such Partner in subsequent
years under Sections 704(e)(2) and 706(d) of the Code and
Treasury Regulation Section 1.751-1(b)(2)(ii), and (ii) the
amount of all distributions that as of the end of such taxable
year, are reasonably expected to be made to such Partner in
subsequent years in accordance with the terms of this Agreement
or otherwise to the extent they exceed offsetting increases to
such Partner's Capital Account that are reasonably expected to
occur during (or prior to) the year in which such distributions
are reasonably expected to be made (other than increases as a
result of a minimum gain chargeback pursuant to Section 5.1(e)(i)
or 5.1(e)(ii)). The foregoing definition of Adjusted Capital
Account is intended to comply with the provisions of Treasury
Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith. The Adjusted Capital Account in respect
of a Unit or any other Partnership Security shall be the amount
which such Adjusted Capital Account would be if such Unit or
other Partnership Security was the only interest in the
Partnership held by a Limited Partner.
"Adjusted Property" means any property the Carrying Value of
which has been adjusted pursuant to Section 4.6(d)(i) or
4.6(d)(ii). Once an Adjusted Property is deemed distributed by,
and recontributed to, the Partnership for federal income tax
purposes upon a termination thereof pursuant to Section 708 of
the Code, such property shall thereafter constitute a Contributed
Property until the Carrying Value of such property is further
adjusted pursuant to Section 4.6(d)(i) or 4.6(d)(ii) hereof.
"Affiliate" means, with respect to any Person, any other
Person that directly or indirectly Controls, is Controlled by or
is under common Control with, the Person in question.
"Agreed Allocation" means any allocation made pursuant to
Section 5.1(a), (b), (c) or (d).
"Agreed Value" of any Contributed Property means the fair
market value of such property or other consideration at the time
of contribution as determined by the General Partner using such
reasonable method of valuation as it may adopt. The General
Partner shall, in its sole discretion, use such method as it
deems reasonable and appropriate to allocate the aggregate Agreed
Value of Contributed Properties contributed to the Partnership in
a single or integrated transaction among such properties on a
basis proportional to their fair market value.
"Agreement" means this Second Amended and Restated Agreement
of Limited Partnership of El Paso Energy Partners, L.P.,
(including any exhibits, schedules or other attachments) as it
may be further amended, supplemented, restated or otherwise
modified from time to time.
"Argo" means Argo, L.L.C., a Delaware limited liability
company.
"Argo I" means Argo I, L.L.C., a Delaware limited liability
company.
"Argo II" means Argo II, L.L.C., a Delaware limited
liability company.
"Assignee" means (a) a Person to whom one or more Units have
been transferred in a manner permitted under this Agreement and
who has executed and delivered a Transfer Application as required
by this Agreement but who has not become a Substituted Limited
Partner or (b) a Non-citizen Assignee.
"Available Cash" has the meaning assigned to such term in
Section 5.8(a).
"Book-Tax Disparity" means with respect to any item of
Contributed Property or Adjusted Property, as of the date of any
determination, the difference between the Carrying Value of such
Contributed Property or Adjusted Property and the adjusted basis
thereof for federal income tax purposes as of such date. A
Partner's share of the Partnership's Book-Tax Disparities in all
of its Contributed Property and Adjusted Property will be
reflected by the difference between such Partner's Capital
Account balance as maintained pursuant to Section 4.6 and the
hypothetical balance of such Partner's Capital Account computed
as if it had been maintained strictly in accordance with federal
income tax accounting principles.
"Business Day" means Monday through Friday of each week,
except that a legal holiday recognized as such by the government
of the United States or the States of New York or Texas shall not
be regarded as a Business Day.
"Capital Account" means the capital account maintained for
any Partner pursuant to Section 4.6.
"Capital Contribution" means any cash, cash equivalents or
the Net Agreed Value of Contributed Property that a Partner
contributes (or is deemed to contribute) to the Partnership
pursuant to Section 4.1, 4.3, 4.4, 4.6(c) or 13.3(c).
"Carrying Value" means (a) with respect to a Contributed
Property, the Agreed Value of such property reduced (but not
below zero) by all depreciation, amortization and cost recovery
deductions charged to the Partners' Capital Accounts, and (b)
with respect to any other Partnership property, the adjusted
basis of such property for federal income tax purposes, all as of
the time of determination. The Carrying Value of any property
shall be adjusted from time to time in accordance with Sections
4.6(d)(i) and 4.6(d)(ii) and to reflect changes, additions or
other adjustments to the Carrying Value for dispositions and
acquisitions of Partnership properties, as deemed appropriate by
the General Partner.
"Cash from Interim Capital Transactions" has the meaning
assigned to such term in Section 5.8(b).
"Cash from Operations" has the meaning assigned to such term
in Section 5.8(c).
"Cause" means a court of competent jurisdiction has entered
a final non-appealable judgment finding the General Partner
liable for actual fraud, gross negligence or willful or wanton
misconduct in its capacity as general partner of the Partnership.
"Certificate" means a certificate, substantially in the form
of Exhibit A-1, A-2 or A-3 to this Agreement or in such other
forms as may be adopted by the General Partner in its sole
discretion, issued by the Partnership evidencing ownership of one
or more Series A Preference Units, Series A Common Units, or
Series B Preference Units, respectively, or a certificate, in
such form as may be adopted by the General Partner in its sole
discretion, issued by the Partnership evidencing ownership of one
or more other Partnership Securities.
"Certificate of Limited Partnership" means the certificate
of limited partnership filed with the Secretary of State of the
State of Delaware as referenced in Section 6.2, as such
Certificate has been amended through the Second Restatment Date
and may be amended or restated from time to time.
"Charter Documents" means the certificate of formation,
certificate of incorporation, certificate of limited partnership,
bylaws, limited liability company agreement and/or limited
partnership agreement, as applicable, of each relevant Person, as
they may be amended, supplemented, restated or otherwise modified
from time to time.
"Citizenship Certification" means a properly completed
certificate in such form as may be specified by the General
Partner by which an Assignee or a Limited Partner certifies that
he (and if he is a nominee holding for the account of another
Person, that to the best of his knowledge such other Person) is
an Eligible Citizen.
"Closing Date" has the meaning assigned to such term in the
Underwriting Agreement, being February 19, 1993.
"Closing Price" has the meaning assigned to such term in
Section 17.2.
"Code" means the Internal Revenue Code of 1986, as amended
and in effect from time to time, as interpreted by the applicable
regulations thereunder. Any reference herein to a specific
section or sections of the Code shall be deemed to include a
reference to any corresponding provision of future law.
"Combined Interest" has the meaning assigned to such term in
Section 13.3(a).
"Common Unit" means a Unit having the rights and obligations
specified with respect to Series A Common Units, or any other
class or series of Common Units hereafter existing, in this
Agreement.
"Company" means El Paso Energy Partners Company (formerly
known as Leviathan Gas Pipeline Company), a Delaware corporation.
"Contributed Property" means each property or other asset in
such form as may be permitted by the Delaware Act, including
intangible property generally but excluding cash, contributed to
the Partnership (or deemed contributed to the Partnership on
termination and reconstitution thereof pursuant to Section 708 of
the Code or otherwise). Once the Carrying Value of a Contributed
Property is adjusted pursuant to Section 4.6(d), such property
shall no longer constitute Contributed Property for purposes of
Section 5.1, but shall be deemed Adjusted Property for such
purposes.
"Contributing Partner" means each Partner contributing (or
deemed to have contributed on termination and reconstitution of
the Partnership pursuant to Section 708 of the Code or otherwise)
a Contributed Property.
"Control" (including its derivatives) means the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person whether
through ownership of voting securities, by contract or otherwise.
"Conveyance Agreement" means the Contribution, Conveyance
and Assumption Agreement dated as of February 19, 1993, among the
Company, the Partnership and the Operating Companies, as in
existence on that date.
"Crystal Merger Agreement" means the Agreement and Plan of
Merger dated as of August 28, 2000, among the Partnership, El
Paso Partners Acquisition, L.L.C., Crystal Holding, Inc., and
Crystal Gas Storage, Inc., providing for the issuance of Series B
Preference Units, among other things.
"Current Market Price" has the meaning assigned to such term
in Section 17.2.
"Deepwater Holdings" means Deepwater Holdings, L.L.C., a
Delaware limited liability company.
"Delaware Act" means the Delaware Revised Uniform Limited
Partnership Act, 6 Del. C. 17-101, et seq., as amended,
supplemented or restated from time to time, and any successor to
such statute.
"Delos" means Delos Offshore Company, L.L.C., a Delaware
limited liability company.
"Demand Registrations" has the meaning assigned to such term
in Section 6.14(a).
"Departing Partner" means a former General Partner, from and
after the effective date of any withdrawal or removal of such
former General Partner pursuant to Section 13.1 or 13.2.
"Discretionary Allocation" means any allocation of an item
of income, gain, deduction, or loss pursuant to the provisions of
Section 5.1(d)(iii).
"East Breaks" means East Breaks Gathering Company, L.L.C., a
Delaware limited liability company.
"Economic Risk of Loss" has the meaning set forth in
Treasury Regulation Section 1.752-2(a).
"Eligible Citizen" means a Person qualified to own interests
in real property in jurisdictions in which the Partnership or an
Operating Company does business or proposes to do business from
time to time, and whose status as a Limited Partner or Assignee
does not or would not subject the Partnership or an Operating
Company to a substantial risk of cancellation or forfeiture of
any of its properties or any interest therein. As of the Closing
Date, "Eligible Citizen" means (a) a citizen of the United
States, (b) an association (including a partnership, joint
tenancy and tenancy in common) organized or existing under the
laws of the United States or any state or territory thereof, all
of the members of which are citizens of the United States or
(c) a corporation organized under the laws of the United States
or of any state or territory thereof, of which corporation, to
the best of its knowledge, not more than five percent of the
voting stock, or of all the stock, is owned or controlled by
citizens of countries that deny to United States citizens
privileges to own stock in corporations holding oil and gas
leases similar to the privileges of non-United States citizens to
own stock in corporations holding an interest in oil and gas
leases on federal lands.
"EP Acquisition" means El Paso Partners Acquisition, L.L.C.,
a Delaware limited liability company.
"EP Deepwater" means El Paso Energy Partners Deepwater,
L.L.C., a Delaware limited liability company.
"EP Finance" means El Paso Energy Partners Finance
Corporation, a Delaware corporation.
"EP Operating" means El Paso Energy Partners Operating
Company, L.L.C., a Delaware limited liability company.
"EP Transport" means El Paso Energy Partners Oil Transport,
L.L.C., a Delaware limited liability company.
"Event of Withdrawal" has the meaning assigned to such term
in Section 13.1(a).
"Ewing Bank" means Ewing Bank Gathering Company, L.L.C., a
Delaware limited liability company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, supplemented, restated or otherwise modified from time
to time, and any successor to such statute.
"February 1993 Partnership Agreement" has the meaning
assigned to such term in .Section 1.1.
"First Target Distribution" has the meaning assigned to such
term in Section 5.8(d).
"Flextrend" means Flextrend Development Company, L.L.C., a
Delaware limited liability company.
"General Partner" means the Company, and its successors as
general partner of the Partnership.
"Green Canyon" means Green Canyon Pipe Line Company, L.P., a
Delaware limited partnership (formerly a Delaware limited
liability company).
"HIOS" means High Island Offshore System, L.L.C., a Delaware
limited liability company.
"HIOS" means High Island Offshore System, a Delaware general
partnership.
"Incentive Distribution" means any amount of cash
distributed to the General Partner, in its capacity as general
partner of the Partnership, pursuant to paragraphs (e), (f) and
(g) of Section 5.4 and paragraphs (a)(v)-(vii), and (b(v)-(vii)
of Section 5.5 which exceeds an amount equal to 1.0% of the
aggregate amount of cash then being distributed pursuant to each
such provision.
"Indemnitee" means the General Partner, any Departing
Partner, any Person who is or was an Affiliate of the General
Partner or any Departing Partner, any Person who is or was an
officer, director, employee, partner, agent or trustee of the
General Partner or any Departing Partner or any such Affiliate,
or any Person who is or was serving at the request of the General
Partner or any Departing Partner or any such Affiliate as a
director, officer, employee, partner, agent or trustee of another
Person.
"Initial Limited Partners" means the Organizational Limited
Partner and the Underwriters, unless the context shall otherwise
require.
"Initial Unit Price" means with respect to Series A
Preference Units and Series A Common Units, the initial price per
Series A Preference Unit at which the Underwriters offered the
Series A Preference Units to the public for sale as set forth on
the cover page of the prospectus first issued at or after the
time the Registration Statement filed in connection with the sale
of Series A Preference Units contemplated by the Underwriting
Agreement first became effective and, with respect to any other
class or series of Units, the price per Unit at which such class
or series of Units is initially sold by the Partnership, as
determined by the General Partner in its sole discretion. The
Initial Unit Price for the Series A Preference Units is (a) prior
to the 1996 Split Date, $20.50 per Unit and (b) on and after the
1996 Split Date, $10.25 per Unit, in each such case subject to
adjustment as provided in this Agreement. The Initial Unit Price
with respect to the Series B Preference Units is the Series B
Preference Unit Face Value.
"Interim Capital Transaction" has the meaning assigned to
such term in Section 5.8(e).
"Issue Price" means the price at which a Unit is purchased
from the Partnership, less any sales commission or underwriting
discount charged to the Partnership. The Issue Price for the
Series A Preference Units is (a) prior to the 1996 Split Date,
$19.065 per Unit and (b) on and after the 1996 Split Date,
$9.5325 per Unit, in each such case subject to adjustment as
provided in this Agreement.
"Joint Venture" means any Person other than an Operating
Company in which the Partnership owns (directly or indirectly, of
record or beneficially) stock, membership interest or other
equity interests, the holder of which is generally entitled to
vote for the election of the board of directors or other
governing body of such Person, that has the power to elect more
than 20% but less than a majority of the board of directors or
other governing body, including (as of the Second Restatement
Date) POPCO, Nemo, Deepwater Holdings, West Cam, Stingray, UTOS,
Western Gulf, HIOS, East Breaks, Neptune, Ocean Breeze, Manta Ray
Offshore and Nautilus.
"Limited Partner" means each Initial Limited Partner, each
Substituted Limited Partner, each Additional Limited Partner and
any Departing Partner upon the change of its status from General
Partner to Limited Partner pursuant to Section 13.3 and solely
for purposes of Articles IV, V and VI and Sections 14.3 and 14.4,
shall include an Assignee.
"Liquidator" means the General Partner or other Person
approved pursuant to Section 14.3 who performs the functions
described therein.
"Liquidity Condition" means the requirement that, at the end
of the 90-day period following the Series A Preference Unit
Conversion Date (or, if applicable, the first or second
anniversary thereof), after giving effect to the conversion of
all Series A Preference Units as to which a Series A Preference
Unit Conversion Election Notice has been timely received by the
General Partner, there would be at least 2,000 holders of 100 or
more Series A Common Units.
"Manta Ray Gathering" means Manta Ray Gathering Company,
L.L.C., a Delaware limited liability company.
"Manta Ray Offshore" means Manta Ray Offshore Gathering
Company, L.L.C., a Delaware limited liability company.
"Merger Agreement" has the meaning assigned to such term in
Section 16.1.
"Minimum Gain Attributable to Partner Nonrecourse Debt"
means that amount determined in accordance with the principles of
Treasury Regulation Section 1.704-2(i)(3).
"Minimum Quarterly Distribution" has the meaning assigned to
such term in Section 5.8(f).
"Moray" means Moray Pipeline Company, L.L.C., a Delaware
limited liability company
"National Securities Exchange" means an exchange registered
with the Securities and Exchange Commission under Section 6(a) of
the Exchange Act.
"Nautilus" means Nautilus Pipeline Company, L.L.C., a
Delaware limited liability company.
"Nemo" means Nemo Gathering Company, LLC, a Delaware limited
liability company.
"Neptune" means Neptune Pipeline Company, L.L.C., a Delaware
limited liability company
"Net Agreed Value" means (a) in the case of any Contributed
Property, the Agreed Value of such property reduced by any
liabilities either assumed by the Partnership upon such
contribution or to which such property is subject when
contributed, and (b) in the case of any property distributed to a
Partner or Assignee by the Partnership, the Partnership's
Carrying Value of such property at the time such property is
distributed reduced by any indebtedness either assumed by such
Partner or Assignee upon such distribution or to which such
property is subject at the time of distribution as determined
under Section 752 of the Code.
"Net Income" has the meaning assigned to such term in
Section 5.8(g).
"Net Loss" has the meaning assigned to such term in
Section 5.8(h).
"Net Termination Gain" has the meaning assigned to such term
in Section 5.8(i).
"Net Termination Loss" has the meaning assigned to such term
in Section 5.8(j).
"New Entity" has the meaning assigned to such term in
Section 1.6.
"Non-citizen Assignee" means a Person who the General
Partner has determined in its sole discretion does not constitute
an Eligible Citizen and as to whose Partnership Interest the
General Partner has become the Substituted Limited Partner,
pursuant to Section 11.5.
"Nonrecourse Built-in Gain" meant with respect to any
Contributed Properties or Adjusted Properties that are subject to
a mortgage or negative pledge securing a Nonrecourse Liability,
the amount of any taxable gain that would be allocated to the
Partners pursuant to Section 5.2(b)(i)(A), 5.2(b)(ii)(A) or
5.2(b)(iii) if such properties were disposed of in a taxable
transaction in full satisfaction of such liabilities and for no
other consideration.
"Nonrecourse Deductions" means any and all items of loss,
deduction or expenditure (described in Section 705(a)(2)(B) of
the Code) that in accordance with the principles of Treasury
Regulation Section 1.704-2(b)(1), are attributable to a
Nonrecourse Liability.
"Nonrecourse Liability" has the meaning set forth in
Treasury Regulation Section 1.704-2(b)(3).
"Notice of Election to Purchase" has the meaning assigned to
such term in Section 17.3(b).
"Notice of Election to Redeem" has the meaning assigned to
such term in Section 17.3(a).
"Ocean Breeze" means Ocean Breeze Pipeline Company, L.L.C.,
a Delaware limited liability company
"Operating Company" means any Affiliate that the Partnership
both (i) Controls and (ii) owns (beneficially or of record),
directly or indirectly, stock, membership interest or other
equity interests, the holder of which is generally entitled to
vote for the election of the board of directors or other
governing body of such Affiliate, that has the power to elect at
least a majority of the board of directors or other governing
body of such Person, including (as of the Second Restatement
Date) Argo, Argo I, Argo II, Delos, EP Deepwater, EP Finance, EP
Operating, EP Transport, EP Acquisition, Ewing Bank, Flextrend,
Green Canyon, Manta Ray Gathering, Moray, Poseidon, Sailfish,
Tarpon, VK, VK Deepwater and VK Main Pass.
"Opinion of Counsel" means a written opinion of counsel (who
may be regular counsel to the Partnership or the General Partner)
acceptable to the General Partner.
"Organizational Limited Partner" means Donald V. Weir in his
capacity as the organizational limited partner of the Partnership
pursuant to this Agreement in its form on February 19, 1993.
"Outstanding" means, with respect to the Units or other
Partnership Securities, as the case may be, all Units or other
Partnership Securities of such class or series, as the case may
be, that are issued by the Partnership and reflected as
outstanding on the Partnership's books and records as of the date
of determination.
"Partner" means a General Partner or a Limited Partner and
Assignees thereof, if applicable.
"Partner Nonrecourse Debt" has the meaning set forth in
Treasury Regulation Section 1.704-2(b)(4).
"Partner Nonrecourse Deductions" means any and all items of
loss, deduction or expenditure (including any expenditure
described in Section 705(a)(2)(B) of the Code) that in accordance
with the principles of Treasury Regulation Section 1.704-2(i)(2),
are attributable to a Partner Nonrecourse Debt.
"Partnership" means El Paso Energy Partners, L.P. (formerly
known as Leviathan Gas Pipeline Partners, L.P.), a Delaware
limited partnership governed by this Agreement, and any successor
thereto.
"Partnership Assets" means, initially, all of the assets and
rights of the Company transferred to an Operating Company as set
forth in the Conveyance Agreement and, thereafter, all assets of
the Partnership whether tangible or intangible and whether real,
personal or mixed.
"Partnership Inception" means the Closing Date.
"Partnership Interest" means the interest of a Partner in
the Partnership, which, in the case of a Limited Partner or an
Assignee, shall be expressed in terms of Units or other
Partnership Securities, or a combination thereof, as the case may
be.
"Partnership Interest Adjusting Event" means any subdivision
or combination of the issued Units or other Partnership
Securities, whether by reason of any dividend, split,
recapitalization, reorganization, merger, consolidation, spinoff,
combination or other similar change.
"Partnership Minimum Gain" means the amount determined
pursuant to the provisions of Treasury Regulation Section 1.704-
2(d).
"Partnership Securities" has the meaning assigned to such
term in Section 4.4(a).
"Partnership Year" means the fiscal year of the Partnership,
which shall be the calendar year.
"Person" means an individual or an entity, including,
without limitation, a corporation, partnership, limited liability
company, trust, unincorporated organization, governmental entity,
association or other entity.
"POPCO" means Poseidon Oil Pipeline Company, L.L.C. a
Delaware limited liability company.
"Poseidon" means Poseidon Pipeline Company, L.L.C., a
Delaware limited liability company.
"Preference Unit" means any Series A Preference Unit, Series
B Preference Unit or other Unit of any class or series of
Preference Units hereafter existing.
"Preference Unit Combined Capital Amount" means, with
respect to any date of determination, the sum of (i) the quotient
of (x) the Series A Preference Unit Capital Amount divided by (y)
the number of Series A Preference Units Outstanding on such date
and (ii) the Series B Preference Unit Liquidation Value on such
date.
"Preference Unit Sharing Ratios" means the Series A
Preference Unit Sharing Ratio and the Series B Preference Unit
Sharing Ratio.
"Purchase Date" means the date determined by the General
Partner, an Affiliate of the General Partner or the Partnership,
as the case may be, as the date for purchase of all Outstanding
Units (other than Units owned by the General Partner and its
Affiliates) pursuant to Article XVII.
"Rate" has the meaning assigned to such term in Section 9.6.
"Recaptured Income" means any gain recognized by the
Partnership (computed without regard to any adjustment required
by Section 734 or 743 of the Code) upon the disposition of any
property or asset of the Partnership, which gain is characterized
as ordinary income because it represents the recapture of
deductions previously taken with respect to such property or
asset.
"Record Date" means the date established by the General
Partner for determining (a) the identity of Limited Partners (or
Assignees if applicable) entitled to notice of, or to vote at any
meeting of Limited 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 action of Limited
Partners or (b) the identity of Record Holders entitled to
receive any report or distribution.
"Record Holder" means (i) with respect to the Series A
Preference Units and the Series A Common Units, the Person in
whose name such Unit is registered on the books of the Transfer
Agent as of the opening of business on a particular Business Day
and (ii) with respect to any other Partnership Security, the
Person in whose name such security is registered on the books of
the transfer agent for such security or the Partnership, as
applicable.
"Redeemable Units" means any Units for which a redemption
notice has been given, and has not been withdrawn, under
Section 11.6.
"Redemption Date" has the meaning assigned to such term in
Section 17.3(a).
"Registration Statement" means the Registration Statement on
Form S-1 (Registration No. 33-55642), as it has been and as it
may be amended or supplemented from time to time, filed by the
Partnership with the Securities and Exchange Commission under the
Securities Act to register the offering and sale of Preference
Units in the Series A Preference Unit Initial Offering.
"Required Allocations" means any allocation (or limitation
imposed on any allocation) of an item of income, gain, deduction
or loss pursuant to (a) the proviso-clauses of
Sections 5.1(b)(i)(B), 5.1(b)(i)(C), 5.1(b)(i)(D), and
Sections 5.1(b)(ii)(B), 5.1(b)(ii)(C) and 5.1(b)(ii)(D) or (b)
Section 5.1(e), such allocations (or limitations thereon) being
directly or indirectly required by the Treasury Regulations
promulgated under Section 704(b) of the Code.
"Reserve Amount" means a reserve, to be funded and
maintained by the Partnership, consisting of the aggregate cash
on hand in the Partnership and the Operating Companies at the
Partnership Inception, on a combined basis, increased by net cash
proceeds to the Partnership from the exercise by the Underwriters
of the over-allotment option which shall be deemed to occur for
purposes of distribution of the Reserve Amount at the Partnership
Inception. The General Partner, in its sole discretion, may
increase or decrease the Reserve Amount, from time to time, after
the Partnership Inception.
"Residual Gain" or "Residual Loss" means any item of gain or
loss, as the case may be, of the Partnership recognized for
federal income tax purposes resulting from a sale, exchange or
other disposition of a Contributed Property or Adjusted Property,
to the extent such item of gain or loss is not allocated pursuant
to Section 5.2(b)(i)(A) or 5.2(b)(ii)(A), to eliminate Book-Tax
Disparities.
"Revolving Credit Facility" means a revolving credit
facility for a maximum amount of $50 million which the
Partnership has entered into with a syndicate of commercial
banks.
"Sailfish" means Sailfish Pipeline Company, L.L.C., a
Delaware limited liability company.
"Second Restatement Date" means August 31, 2000.
"Second Target Distribution" has the meaning assigned to
such term in Section 5.8(k).
"Securities Act" means the Securities Act of 1933, as
amended, supplemented, restated or otherwise modified from time
to time, and any successor to such statute.
"Series A Common Unit" means a Unit having the rights and
obligations specified with respect to Series A Common Units in
this Agreement (previously referred to only as a Common Unit).
"Series A Preference Unit" means a Unit having the rights
and obligations specified with respect to Series A Preference
Units in this Agreement (previously referred to only as a
Preference Unit).
"Series A Preference Unit Capital Amount" means, with
respect to any date of determination, the aggregate Capital
Account balance for all holders of Series A Preference Units.
"Series A Preference Unit Conversion Election Notice" has
the meaning assigned to such term in Section 5.6(b).
"Series A Preference Unit Conversion Opportunity Notice" has
the meaning assigned to such term in Section 5.6(b).
"Series A Preference Unit Conversion Date" means the first
date that is at the end of a calendar quarter on or after
March 31, 1998 upon which (i) there shall be no Series A
Preference Unit Cumulative Deficiency, (ii) the Partnership shall
have distributed Available Cash constituting Cash from Operations
of not less than $2.40 per Unit (adjusted, since the Closing
Date, for any distributions of Available Cash from Interim
Capital Transactions and in accordance with Sections 5.9 and
9.6), excluding amounts paid to holders of Series A Preference
Units in respect of Series A Preference Unit Deficiencies, in
respect of the Series A Preference Units during each of the three
immediately preceding consecutive non-overlapping twelve-month
periods, and (iii) the sum of all amounts distributed in respect
of Series A Common Units during each of the same three
consecutive non-overlapping twelve-month periods is not less than
$2.40 (adjusted for any distributions of Available Cash from
Interim Capital Transactions and in accordance with Sections 5.9
and 9.6) per Series A Common Unit.
"Series A Preference Unit Cumulative Deficiency" has the
meaning assigned to such term in Section 5.8(l).
"Series A Preference Unit Deficiency" has the meaning
assigned to such term in Section 5.8(m).
"Series A Preference Unit Initial Offering" means the
initial offering of Series A Preference Units to the public, as
described in the Registration Statement.
"Series A Preference Unit Preference Period" means the
period commencing upon the Closing Date and ending on the date
determined under Sections 5.6(c) and 5.6(d).
"Series A Preference Unit Sharing Ratio" means, with respect
to any date of determination, the quotient derived by dividing
the Series A Preference Unit Capital Amount on such date by the
Preference Unit Combined Capital Amount on such date.
"Series B Preference Unit" means a Unit having the rights
and obligations specified with respect to Series B Preference
Units in this Agreement.
"Series B Preference Unit Accretion Amount" means, for each
Outstanding Series B Preference Unit on each relevant Series B
Preference Unit Accretion Date, an amount equal to the product of
(i) the average Series B Preference Unit Liquidation Value during
the period beginning on the later of the Series B Preference Unit
Issuance Date or the day immediately following the most recent
Series B Preference Unit Accretion Date and ending on (and
including) the relevant Series B Preference Unit Accretion Date
and (ii) (A) prior to the Series B Preference Unit Preference
Date, 0.05 and (B) on and after the Series B Preference Unit
Preference Date, 0.06.
"Series B Preference Unit Accretion Date" means, as
applicable, each June 30 and December 31 of each calendar year
occurring after the Series B Preference Unit Issuance Date, and,
with respect to any Series B Preference Unit that is redeemed,
the date upon which such Series B Preference Unit is redeemed .
"Series B Preference Unit Deficiency" means, for any Series
B Preference Unit, with respect to any date of determination, the
positive difference (if any) between (i) the sum of all Series B
Preference Unit Accretion Amounts for such Unit from the Series B
Preference Unit Issuance Date through the relevant date of
determination less (ii) the sum of all distributions paid in
respect of such Unit from the Series B Preference Unit Issuance
Date through the relevant date of determination.
"Series B Preference Unit Discretionary Distribution Amount"
has the meaning assigned to such term in Section 5.3.
"Series B Preference Unit Face Value" means $1,000 per
Series B Preference Unit, as adjusted for Partnership Interest
Adjusting Events and distributions of Cash from Interim Capital
Transactions pursuant to Section 5.7 or distributions in
connection with the dissolution or liquidation of the Partnership
theretofore made in respect of such Unit.
"Series B Preference Unit Issuance Date" means August 30,
2000.
"Series B Preference Unit Liquidation Value" means, for any
Outstanding Series B Preference Unit, with respect to any date of
determination, an amount equal to the sum of (i) the Series B
Preference Unit Face Value and (ii) the Series B Preference Unit
Deficiency on such date.
"Series B Preference Unit Preference Date" means the first
day of the calendar quarter immediately following the calendar
quarter that includes August 29, 2010.
"Series B Preference Unit Sharing Ratio" means, with respect
to any date of determination, the quotient derived by dividing
the aggregate Series B Preference Unit Liquidation Value for all
Series B Preference Units on such date by the Preference Unit
Combined Capital Amount on such date.
"Special Approval" means approval of a majority of the
members of the Conflicts and Audit Committee of the Partnership.
"Stingray" means Stingray Pipeline Company, L.L.C., a
Delaware limited liability company (formerly a Delaware general
partnership).
"Stingray Holding" means Stingray Holding, L.L.C., a
Delaware limited liability company.
"Substituted Limited Partner" means a Person who is admitted
as a Limited Partner to the Partnership pursuant to Section 12.2
in place of and with all the rights of a Limited Partner and who
is shown as a Limited Partner on the books and records of the
Partnership.
"Surviving Business Entity" has the meaning assigned to such
term in Section 16.2(b).
"Tarpon" means Tarpon Transmission Company, a Texas
corporation.
"Termination Capital Transaction" has the meaning assigned
to such term in Section 5.8(n).
"Third Target Distribution" has the meaning assigned to such
term in Section 5.8(o).
"Trading Day" has the meaning assigned to such term in
Section 17.2.
"Transfer Agent" means ChaseMellon Shareholder Services LLC
or such bank, trust company or other Person (including, without
limitation, the General Partner or one of its Affiliates) as
shall be appointed from time to time by the Partnership to act as
registrar and transfer agent for the Units or any applicable
Partnership Securities.
"Transfer Application" means an application and agreement
for transfer of Units in the form set forth on the back of a Unit
Certificate or in a form substantially to the same effect in a
separate instrument.
"Treasury Regulation" has the meaning assigned to such term
in Section 1.6.
"Underwriter" means each Person named as an underwriter in
the Underwriting Agreement who purchased Units pursuant thereto.
"Underwriting Agreement" means the Underwriting Agreement
dated February 11, 1993, among the Underwriters, the Partnership,
the Operating Companies and the General Partner providing for the
purchase of Series A Preference Units by such Underwriter.
"Unit" means a Partnership Interest of a Limited Partner or
Assignee in the Partnership representing a fractional part of the
Partnership Interests of all Limited Partners and Assignees.
"Unit Certificate" means a certificate or certificates in
such form as may be hereafter adopted by the General Partner in
its sole discretion issued by the Partnership evidencing
ownership of one or more Units.
"Unitholder" means a Person who is the holder of a Unit on
the records of the Partnership.
"Unrealized Gain" attributable to any item of Partnership
property means, as of any date of determination, the excess, if
any, of (a) the fair market value of such property as of such
date over (b) the Carrying Value of such property as of such date
(prior to any adjustment to be made pursuant to Section 4.6(d) as
of such date). In determining such Unrealized Gain, the
aggregate cash amount and fair market value of all Partnership
Assets shall be determined by the General Partner using such
reasonable method of valuation as it may adopt. The General
Partner shall allocate such aggregate value among the assets of
the Partnership (in such manner as it determines in its sole
discretion to be reasonable) to arrive at a fair market value-
for individual properties.
"Unrealized Loss" attributable to any item of Partnership
property means, as of any date of determination, the excess, if
any, of (a) the Carrying Value of such property as of such date
(prior to any adjustment to be made pursuant to Section 4.6(d) as
of such date) over (b) the fair market value of such property as
of such date. In determining such Unrealized Loss, the aggregate
cash amount and fair market value of all Partnership Assets shall
be determined by the General Partner using such reasonable method
of valuation as it may adopt. The General Partner shall allocate
such aggregate value among the assets of the Partnership (in such
manner as it determines in its sole discretion to be reasonable)
to arrive at a fair market value for individual properties.
"Unrecovered Capital" means, with respect to any date of
determination, the Initial Unit Price, less the sum of all
distributions made up to (and including) such date in respect of
a Unit that was sold in the initial offering of such Units
constituting, and which for purposes of determining the priority
of such distribution is treated as constituting, Cash from
Interim Capital Transactions and of any distributions of cash (or
the Net Agreed Value of any distributions in kind) in connection
with the dissolution and liquidation of the Partnership
theretofore made in respect of a Unit that was sold in the
initial offering of such Units.
"UTOS" means UT Offshore System, L.L.C., a Delaware limited
liability company (formerly a Delaware general partnership).
"VK" means Viosca Knoll Gathering Company, a Delaware
general partnership.
"VK Deepwater" means VK Deepwater Gathering Company, L.L.C.,
a Delaware limited liability company.
"VK Main Pass" means VK-Main Pass Gathering Company, L.L.C.,
a Delaware limited liability company.
"Voting Units" means, depending on the context in which it
is used, (i) with respect to matters on which Units are expressly
granted the right to vote in this Agreement, any Series A
Preference Units, Series A Common Units and any other Units
issued after the Second Restatement Date with voting rights
similar to those of Series A Common Units, and excluding any
Units or other Partnership Securities not expressly granted such
voting rights in this Agreement (such as Series B Preference
Units), or (ii) with respect to a particular matter that is
subject to the vote of security holders, any Units or other
Partnership Securities which this Agreement or the Delaware Act
expressly grant the right to vote on such matter.
"West Cam" means West Cameron Dehydration Company, L.L.C., a
Delaware limited liability company.
"Western Gulf" means Western Gulf Holdings, L.L.C., a
Delaware limited liability company.
"Withdrawal Opinion of Counsel" has the meaning assigned to
such term in Section 13.1(b).
ARTICLE III
Purpose
3.1 Purpose and Business
. The purpose and nature of the business to be conducted by the
Partnership shall be (i) to serve as the managing member of each
of the initial Operating Companies and, in connection therewith,
to exercise all of the rights and powers conferred upon the
Partnership as the managing member of the Operating Companies
pursuant to their Charter Documents or otherwise, (ii) to engage
directly in, or to enter into any partnership, joint venture or
similar arrangement to engage in, any business activity that
lawfully may be conducted by a limited partnership organized
pursuant to the Delaware Act and, in connection therewith, to
exercise all of the rights and powers conferred upon the
Partnership pursuant to the agreements relating to such business
activity, (iii) to do anything necessary or appropriate to the
foregoing (including, without limitation, the making of capital
contributions or loans to the Operating Companies or in
connection with its involvement in the activities referred to in
clause (ii) of this sentence), and (iv) to engage in any other
business activity as permitted under Delaware law. The General
Partner has no obligation or duty to the Partnership, the Limited
Partners or the Assignees to propose or approve, and in its sole
discretion may decline to propose or approve, the conduct by the
Partnership of any business.
3.2 Powers
. The Partnership shall be empowered to do any and all acts and
things necessary, appropriate, proper, advisable, incidental to
or convenient for the furtherance and accomplishment of the
purposes and business described in Section 3.1 and for the
protection and benefit of the Partnership.
ARTICLE IV
Capital Contributions
4.1 Initial Contributions
. To form the Partnership under the Delaware Act the General
Partner has made an initial Capital Contribution to the
Partnership in the amount of $10 for an interest in the
Partnership and has been admitted as the General Partner of the
Partnership, and the Organizational Limited Partner has made a
Capital Contribution to the Partnership in the amount of $990 for
an interest in the Partnership and has been admitted as the
Organizational Limited Partner of the Partnership.
4.2 Return of Initial Contributions
. As of the Closing Date, after giving effect to (i) the
transactions contemplated by Section 4.3 and (ii) the admission
to the Partnership of the Initial Limited Partners in accordance
with this Agreement, the interest in the Partnership of the
Organizational Limited Partner shall be terminated, the $10
Capital Contribution by the General Partner and the $990 Capital
Contribution by the Organizational Limited Partner as initial
Capital Contributions shall be refunded and the interest of the
Organizational Limited Partner as a Limited Partner of the
Partnership shall be terminated and withdrawn. Ninety-nine
percent (99%) of any interest or other profit that may have
resulted from the investment or other use of such initial Capital
Contributions shall be allocated and distributed to the
Organizational Limited Partner, and the balance thereof shall be
allocated and distributed to the General Partner.
4.3 Contribution by the General Partner and the Initial Limited
Partner.
(a) On the Closing Date, the General Partner shall, as set forth
in the Conveyance Agreement, contribute, transfer, convey, assign
and deliver to the Partnership or the Operating Companies, as a
Capital Contribution, those assets subject to such obligations as
are described in the Conveyance Agreement in consideration for
the continuation of its 1.0% general partner interest in the
Partnership and 3,570,000 Series A Common Units.
(b) Subject to completion of the Capital Contributions referred
to in Section 4.3(a), on the Closing Date, each Underwriter shall
contribute and deliver to the Partnership, as a Capital
Contribution, cash in an amount equal to the Issue Price per Unit
multiplied by the number of Series A Preference Units specified
in the Underwriting Agreement to be purchased by such Underwriter
on the Closing Date. In exchange for such Capital Contribution,
the Partnership shall issue Series A Preference Units to each
Underwriter on whose behalf such Capital Contribution is made in
an amount equal to the quotient obtained by dividing (x) the cash
contribution to the Partnership by or on behalf of such
Underwriter by (y) the Issue Price per Unit. Upon receipt of
such Capital Contribution and a completed Transfer Application,
each Underwriter shall be admitted to the Partnership as an
Initial Limited Partner in respect of the Series A Preference
Units so issued to it.
(c) To the extent that the Underwriters' over-allotment option
is exercised, each Underwriter exercising such option shall
contribute and deliver to the Partnership cash in an amount equal
to the Issue Price per Unit multiplied by the number of Series A
Preference Units to be purchased by such Underwriter from the
Partnership pursuant to the over-allotment option at the "Option
Closing Date," as such term is used in the Underwriting
Agreement. In exchange for such Capital Contribution, the
Partnership shall issue Series A Preference Units to each
Underwriter on whose behalf such Capital Contribution is made in
an amount equal to the quotient obtained by dividing (x) the cash
contribution to the Partnership by or on behalf of such
Underwriter by (y) the Issue Price per Unit. The Partnership is
expressly authorized to purchase up to 393,750 Series A Common
Units from the General Partner at the Issue Price per Unit in
connection with the exercise of the over-allotment option by the
Underwriters.
4.4 Issuance of Additional Units and Other Securities.
(a) Subject to Section 4.4(c), the General Partner is hereby
authorized to cause the Partnership to issue, in addition to the
Series A Preference Units and Series A Common Units issued
pursuant to Section 4.3, such additional Series A Preference
Units or other Units (including, specifically, Series A Common
Units issuable upon conversion of Series A Preference Units as
contemplated by Section 5.6), or classes or series thereof, or
options, rights, warrants or appreciation rights relating
thereto, or any other type of equity security that the
Partnership may lawfully issue, any unsecured or secured debt
obligations of the Partnership or debt obligations of the
Partnership convertible into any class or series of equity
securities of the Partnership (collectively, "Partnership
Securities"), for any Partnership purpose, at any time or from
time to time, to the Partners or to other Persons for such
consideration and on such terms and conditions as shall be
established by the General Partner in its sole discretion, all
without the approval of any Limited Partners. The General
Partner shall have sole discretion, subject to the guidelines set
forth in this Section 4.4 and the requirements of the Delaware
Act, in determining the consideration and terms and conditions
with respect to any future issuance of Partnership Securities.
The additional Series A Preference Units to be issued pursuant to
this Section 4.4 are in addition to the Series A Preference Units
issuable upon exercise of the Underwriters' over-allotment
option, in accordance with the Underwriting Agreement.
(b) Notwithstanding any provision of this Agreement to the
contrary, additional Partnership Securities to be issued by the
Partnership pursuant to this Section 4.4 shall be issuable from
time to time in one or more classes, or one or more series of any
of such classes, with such designations, preferences and
relative, participating, optional or other special rights, powers
and duties, including, without limitation, rights, powers and
duties senior to existing classes and series of Partnership
Securities (except as provided in Section 4.4(c)), all as shall
be fixed by the General Partner in the exercise of its sole and
complete discretion, subject to Delaware law and Section 4.4(c),
including, without limitation (i) the allocations of items of
Partnership income, gain, loss, deduction and credit to each such
class or series of Partnership Securities; (ii) the right of each
such class or series of Partnership Securities to share in
Partnership distributions; (iii) the rights of each such class or
series of Partnership Securities upon dissolution and liquidation
of the Partnership; (iv) whether such class or series of
additional Partnership Securities is redeemable by the
Partnership and, if so, the price at which, and the terms and
conditions upon which such class or series of additional
Partnership Securities may be redeemed by the Partnership; (v)
whether such class or series of additional Partnership Securities
is issued with the privilege of conversion and, if so, the rate
at which, and the terms and conditions upon which, such class or
series of Partnership Securities may be converted into any other
class or series of Partnership Securities; (vi) the terms and
conditions upon which each such class or series of Partnership
Securities will be issued, evidenced by Certificates (as
applicable) and assigned or transferred; and (vii) the right, if
any, of each such class or series of Partnership Securities to
vote on Partnership matters, including, without limitation,
matters relating to the relative rights, preferences and
privileges of each such class or series.
(c) Notwithstanding the terms of Sections 4.4(a) and 4.4(b), so
long as any Series A Preference Units or Series B Preference
Units are Outstanding, the issuance by the Partnership of any
Partnership Interests shall be subject to the following
restrictions and limitations:
(i) During the Series A Preference Unit Preference Period, the
Partnership shall not (A) issue an aggregate of more than
5,000,000 (10,000,000 on and after the 1996 Split Date)
additional Series A Preference Units or other Partnership
Interests which are pari passu with Series A Preference Units (in
addition to those issued, if any, pursuant to the exercise of the
Underwriters' over allotment option) or (B) issue any other
Partnership Interests having rights to distributions or in
liquidation ranking prior to the Series A Preference Units, in
each case without the prior approval of holders of at least
66 2/3% of the Outstanding Series A Preference Units;
(ii) After the Series A Preference Unit Preference Period, the
Partnership may not issue securities with rights as to
distributions and allocations or liquidation ranking prior to (as
distinguished from pari passu with) the Series A Preference Units
without the approval of holders of at least 66 2/3% of the
Outstanding Series A Preference Units and the approval of holders
of at least 66 2/3% of the Outstanding Series B Preference Units
(including those held by the General Partner and its Affiliates);
(iii) Upon the issuance of any Units or other Partnership
Securities by the Partnership pursuant to this Section 4.4, the
General Partner shall be required to make additional Capital
Contributions to the Partnership or convert a number of
Partnership Securities owned by the General Partner into General
Partner interests such that the General Partner shall at all
times have a balance in its Capital Account equal to 1.0% of the
total positive Capital Account balances of all Partners; and
(iv) After the Series B Preference Unit Issuance Date, the
Partnership may not issue securities with rights as to
distributions and allocations or liquidation ranking prior to (as
distinguished from pari passu with) the Series B Preference Units
without the approval of holders of at least 66 2/3% of the
Outstanding Series B Preference Units (including those held by
the General Partner and its Affiliates).
(d) The General Partner is hereby authorized and directed to
take all actions that it deem necessary or appropriate in
connection with each issuance of Units or other Partnership
Securities pursuant to Section 4.4(a) to amend this Agreement in
any manner that it deem necessary or appropriate to provide for
each such issuance, to admit Additional Limited Partners in
connection therewith and to specify the relative rights, powers
and duties of the holders of the Units or other Partnership
Securities being so issued.
(e) Subject to the terms of Sections 4.4(c) and 6.4(c), the
General Partner is authorized to cause the issuance of
Partnership Securities pursuant to any employee benefit plan for
the benefit of employees responsible for the operations of the
Partnership or the Operating Companies maintained or sponsored by
the General Partner, the Partnership, the Operating Companies or
any Affiliate of any of them.
(f) The General Partner shall do all things necessary to comply
with the Delaware Act and is authorized and directed to do all
things it deems to be necessary or advisable in connection with
any future issuance of Partnership Securities, including, without
limitation, compliance with any statute, rule, regulation or
guideline of any federal state or other governmental agency or
any National Securities Exchange on which the Units or other
Partnership Securities are listed for ruling.
4.5 Limited Preemptive Rights
. Except as provided in Section 4.4(c)(iii), no Person shall
have any preemptive, preferential or other similar right with
respect to (a) additional Capital Contributions; (b) issuance or
sale of any class or series of Units or other Partnership
Securities, whether unissued, held in the treasury or hereafter
created; (c) issuance of any obligations, evidences of
indebtedness or other securities of the Partnership convertible
into or exchangeable for, or carrying or accompanied by any
rights to receive, purchase or subscribe to, any such Units or
other Partnership Securities; (d) issuance of any right of
subscription to or right to receive, or any warrant or option for
the purchase of, any such Units or other Partnership Securities;
or (e) issuance or sale of any other securities that may be
issued or sold by the Partnership. The General Partner shall
have the right, which it may from time to time assign in whole or
in part to any of its Affiliates, to purchase Units or other
Partnership Securities from the Partnership whenever, and on the
same terms that, the Partnership issues Units or other
Partnership Securities to Persons other than the General Partner
and its Affiliates, to the extent necessary to maintain the
percentage interests of the General Partner and its Affiliates of
the applicable class or series of Partnership Interest equal to
that which existed immediately prior to the issuance of such
Units or other Partnership Securities.
4.6 Capital Accounts.
(a) The Partnership shall maintain for each Partner (or a
beneficial owner of Units held by a nominee in any case in which
the nominee has furnished the identity of such owner to the
Partnership in accordance with Section 6031(c) of the Code or any
other method acceptable to the General Partner in its sole
discretion) a separate Capital Account in accordance with the
rules of Treasury Regulation Section 1.704-1(b)(2)(iv). Such
Capital Account shall be increased by (i) the amount of all
Capital Contributions made by such Partner to the Partnership
pursuant to this Agreement and (ii) all items of Partnership
income and gain (including, without limitation, income and gain
exempt from tax) computed in accordance with Section 4.6(b) and
allocated to such Partner pursuant to Sections 4.2 and 5.1 and
decreased by (x) the amount of cash or Net Agreed Value of all
distributions of cash or property made to such Partner pursuant
to this Agreement and (y) all items of Partnership deduction and
loss computed in accordance with Section 4.6(b) and allocated to
such Partner pursuant to Section 5.1.
(b) For purposes of computing the amount of any item of income,
gain, loss or deduction to be reflected in the Partners' Capital
Accounts, the determination, recognition and classification of
any such item shall be the same as its determination, recognition
and classification for federal income tax purposes (including,
without limitation, any method of depreciation, cost recovery or
amortization used for that purpose), provided, that:
(i) Solely for purposes of this Section 4.6, the Partnership
shall be treated as owning directly its proportionate share (as
determined by the General Partner based upon the provisions of
the Charter Documents) of (x) all property owned by the non-
corporate Operating Companies and Joint Ventures and (y) the fair
market value of the stock of the corporate Operating Companies
and Joint Ventures.
(ii) All fees and other expenses incurred by the Partnership to
promote the sale of (or to sell) a Partnership Interest that can
neither be deducted nor amortized under Section 709 of the Code,
if any, shall, for purposes of Capital Account maintenance, be
treated as an item of deduction at the time such fees and other
expenses are incurred and shall be allocated among the Partners
pursuant to Section 5.1.
(iii) Except as otherwise provided in Treasury Regulation
Section 1.704-1(b)(2)(iv)(m), the computation of all items of
income, gain, loss and deduction shall be made without regard to
any election under Section 754 of the Code which may be made by
the Partnership and, as to those items described in Section
705(a)(1)(B) or 705(a)(2)(B) of the Code, without regard to the
fact that such items are not includable in gross income or are
neither currently deductible nor capitalized for federal income
tax purposes.
(iv) Any income, gain or loss attributable to the taxable
disposition of any Partnership property shall be determined as if
the adjusted basis of such property as of such date of
disposition were equal in amount to the Partnership's Carrying
Value with respect to such property as of such date.
(v) In accordance with the requirements of Section 704(b) of the
Code, any deductions for depreciation, cost recovery or
amortization attributable to any Contributed Property shall be
determined as if the adjusted basis of such property on the date
it was acquired by the Partnership were equal to the Agreed Value
of such property. Upon an adjustment pursuant to Section 4.6(d)
to the Carrying Value of any Partnership property subject to
depreciation, cost recovery or amortization, any further
deductions for such depreciation, cost recovery or amortization
attributable to such property shall be determined (A) as if the
adjusted basis of such property were equal to the Carrying Value
of such property immediately following such adjustment and (B)
using a rate of depreciation cost recovery or amortization
derived from the same method and useful life (or, if applicable,
the remaining useful life) as is applied for federal income tax
purposes; provided, however, that if the asset has a zero
adjusted basis for federal income tax purposes, depreciation,
cost recovery or amortization deductions shall be determined
using any reasonable method that the General Partner may adopt.
(vi) If the Partnership's adjusted basis in depreciable or cost
recovery property is reduced for federal income tax purposes
pursuant to Section 48(q)(1) or 48(q)(3) of the Code, the amount
of such reduction shall, solely for purposes hereof, be deemed to
be an additional depreciation or cost recovery deduction in the
year such property is placed in service and shall be allocated
among the Partners pursuant to Section 5.1. Any restoration of
such basis pursuant to Section 48(q)(2) of the Code shall, to the
extent possible, be allocated in the year of such restoration as
an item of income pursuant to Section 5.1.
(c) A transferee of a Partnership Interest shall succeed to a
pro rata portion of the Capital Account of the transferor
relating to the Partnership Interest so transferred; provided,
however, that if the transfer causes a termination of the
Partnership under Section 708(b)(1)(B) of the Code, the
Partnership's properties shall be deemed to have been distributed
in liquidation of the Partnership to the Partners (including any
transferee of a Partnership Interest that is a party to the
transfer causing such termination) pursuant to Sections 14.3 and
14.4 and recontributed by such Partners in reconstitution of the
Partnership. Any such deemed distribution shall be treated as an
actual distribution for purposes of this Section 4.6. In such
event the Carrying Values of the Partnership properties shall be
adjusted immediately prior to such deemed distribution pursuant
to Section 4.6(d)(ii) and such Carrying Values shall then
constitute the Agreed Values of such properties upon such deemed
contribution to the reconstituted Partnership. The Capital
Accounts of such reconstituted Partnership shall be maintained in
accordance with the principles of this Section 4.6.
(d) (i) Consistent with the provisions of Treasury Regulation
Section 1.704-1(b)(2)(iv)(f), on an issuance of additional Units
for cash or Contributed Property or the conversion of the General
Partner's Partnership Interest to Units pursuant to Section
13.3(b), the Capital Accounts of all Partners and the Carrying
Value of each Partnership property immediately prior to such
issuance shall be adjusted upward or downward to reflect any
Unrealized Gain or Unrealized Loss attributable to such
Partnership property, as if such Unrealized Gain or Unrealized
Loss had been recognized on an actual sale of each such property
immediately prior to such issuance and had been allocated to the
Partners at such time pursuant to Section 5.1.
(ii) In accordance with Treasury Regulation Section 1.704-
1(b)(2)(iv)(f), immediately prior to any distribution to a
Partner of any Partnership property (other than a distribution of
cash that is not in redemption or retirement of a Partnership
Interest), the Capital Accounts of all Partners and the Carrying
Value of each Partnership property shall be adjusted upward or
downward to reflect any Unrealized Gain or Unrealized Loss
attributable to such Partnership property, as if such Unrealized
Gain or Unrealized Loss had been recognized in a sale of such
property immediately prior to such distribution for an amount
equal to its fair market value, and had been allocated to the
Partners, at such time, pursuant to Section 5.1.
4.7 Interest
. No interest shall be paid by the Partnership on Capital
Contributions or on balances in Partners' Capital Accounts.
4.8 No Withdrawal
. No Partner shall be entitled to withdraw any part of its
Capital Contributions or its Capital Account or to receive any
distribution from the Partnership, except as provided in this
Agreement.
4.9 Loans from Partners
. Loans by a Partner to the Partnership shall not constitute
Capital Contributions. If any Partner shall advance funds to the
Partnership in excess of the amounts required hereunder to be
contributed by it to the capital of the Partnership, the making
of such excess advances shall not result in any increase in the
amount of the Capital Account of such Partner. The amount of any
such excess advances shall be a debt obligation of the
Partnership to such Partner and shall be payable or collectible
only out of the Partnership Assets in accordance with the terms
and conditions upon which such advances are made.
4.10 No Fractional Units
. No fractional Units shall be issued by the Partnership.
4.11 Partnership Interest Adjusting Events.
(a) Subject to Section 4.11(d), the General Partner may effect a
Partnership Interest Adjusting Event, including a pro rata
distribution of Units or other Partnership Securities to all
Record Holders thereof or a subdivision or combination of Units
or other Partnership Securities; provided, however, that subject
to Section 4.11(d), after any such Partnership Interest Adjusting
Event, each Partner shall have the same ownership interest in the
Partnership as before such Partnership Interest Adjusting Event.
(b) Whenever such a Partnership Interest Adjusting Event is
declared, the General Partner shall select a Record Date for such
Partnership Interest Adjusting Event at least 20 days prior to
such Record Date. The Record Date shall be as of a date not less
than 10 days prior to the date of the notice to the Record
Holders of such Partnership Interest Adjusting Event. The
General Partner also may cause a firm of independent public
accountants selected by it to calculate the number of Units to be
held by each Record Holder after giving effect to such
Partnership Interest Adjusting Event. The General Partner shall
be entitled to rely on any certificate provided by such firm as
conclusive evidence of the accuracy of such calculation.
(c) Promptly following any such Partnership Interest Adjusting
Event, the General Partner may cause Unit Certificates to be
issued to the Record Holders of Units as of the applicable Record
Date representing the new number of Units held by such Record
Holders, or the General Partner may adopt such other procedures
as it may deem appropriate to reflect such Partnership Interest
Adjusting Event; provided, however, that if any such Partnership
Interest Adjusting Event results in a smaller total number of
Units Outstanding, the General Partner shall require, as a
condition to the delivery to a Record Holder of such new Unit
Certificate, the surrender of any Unit Certificate held by such
Record Holder immediately prior to such Record Date.
(d) The Partnership shall not issue fractional Units upon any
Partnership Interest Adjusting Event. If a Partnership Interest
Adjusting Event would result in the issuance of fractional Units
but for the provision of Section 4.10 and this Section 4.11(d),
each fractional Unit shall be rounded to the nearest whole Unit
(and a 0.5 Unit shall be rounded to the next higher Unit).
ARTICLE V
Allocations and Distributions
5.1 Allocations for Capital Account Purposes
. For purposes of maintaining the Capital Accounts and in
determining the rights of the Partners among themselves, the
Partnership's items of income, gain, loss and deduction (computed
in accordance with Section 4.6(b)) shall be allocated among the
Partners in each taxable year (or portion thereof) as provided
herein below.
(a) Net Income. After giving effect to the allocations in
Section 4.2 and the special allocations set forth in Sections
5.1(d) and 5.1(e), all remaining items of income, gain, loss and
deduction taken into account in computing Net Income for such
taxable period shall be allocated in the same manner as such Net
Income is allocated hereunder, which Net Income shall be
allocated as follows:
(i) First, 100% to the General Partner until the aggregate Net
Income allocated to the General Partner pursuant to this Section
5.1(a)(i) for the current taxable year and all previous taxable
years is equal to the aggregate Net Losses allocated to the
General Partner pursuant to Sections 5.1(b)(i)(D) and
5.1(b)(ii)(D) for all previous taxable years;
(ii) Second, 1% to the General Partner and 99% to the Limited
Partners holding Series A Preference Units and Series B
Preference Units (allocated between each such series and among
the Limited Partners holding Preference Units of each such series
as provided below in this Section 5.1(a)(ii)) until the aggregate
Net Income allocated to any Series A Preference Unit or Series B
Preference Unit pursuant to this Section 5.1(a)(ii) for the
current taxable year and all previous taxable years is equal to
the aggregate Net Losses allocated to any Series A Preference
Unit or Series B Preference Unit pursuant to Sections
5.1(b)(i)(C) and 5.1(b)(ii)(C) for all previous taxable years. As
between the Limited Partners holding Series A Preference Units
and the Limited Partners holding Series B Preference Units, any
distributions under this Section 5.1(a)(ii) shall be allocated in
proportion to the Net Losses allocated to one of each such Units
pursuant to Sections 5.1(b)(i)(C) and 5.1(b)(ii)(C) for all
previous taxable years, and as among the Limited Partners holding
a particular series of Preference Units, such distributions shall
be allocated in the proportion that the respective number of
Preference Units in such series held by them bears to the total
number of Preference Units in such series then Outstanding;
(iii) Third, 99% to the Limited Partners holding Series A
Common Units, in the proportion that the respective number of
Series A Common Units held by them bears to the total number of
Series A Common Units then Outstanding, and 1% to the General
Partner until the aggregate Net Income allocated to any Series A
Common Unit pursuant to this Section 5.1(a)(iii) for the current
taxable year and all previous taxable years is equal to the to
the aggregate Net Losses allocated to any Series A Common Unit
pursuant to Sections 5.1(b)(i)(B) and (b)(ii)(B) for all previous
years; and
(iv) Fourth, the balance, if any, 1% to the General Partner and
99% to the Limited Partners, which allocations to such Limited
Partners shall be made (x) first, to the Limited Partners holding
Series A Preference Units and Series B Preference Units
(allocated between each such series and among the Limited
Partners holding Preference Units of each such series as provided
below in this Section 5.1(a)(iv)) until the total amount
allocated in respect of any Series B Preference Unit under this
Section 5.1(a)(iv) during the period from the Series B Preference
Unit Issuance Date through the date of such allocation is equal
to the total of all Series B Preference Unit Discretionary
Distribution Amounts made during such period in respect thereof
pursuant to Section 5.5(a), and (y) then, to Limited Partners
holding Series A Preference Units and Series A Common Units, in
the proportion that the respective number of Series A Preference
Units and Series A Common Units, as applicable, held by them
bears to the total number of Series A Preference Units and Series
A Common Units then Outstanding. As between the Limited Partners
holding Series A Preference Units and the Limited Partners
holding Series B Preference Units, any distributions under this
Section 5.1(a)(iv) shall be allocated based on the Preference
Unit Sharing Ratios, and as among the Limited Partners holding a
particular series of Preference Units, such distributions shall
be allocated in the proportion that the respective number of
Preference Units in such series held by them bears to the total
number of Preference Units in such series then Outstanding; and
(b) Net Losses. After giving effect to the special allocations
set forth in Sections 5.1(d) and 5.1(e), all remaining items of
income, gain, loss and deduction taken into account in computing
Net Losses for such taxable period shall be allocated in the same
manner as such Net Losses are allocated hereunder, which Net
Losses shall be allocated as follows:
(i) While any Series A Preference Units are Outstanding. During
any period in which any Series A Preference Units are
outstanding:
(A) First, 1% to the General Partner and 99% to the Limited
Partners holding Series A Common Units, Series A Preference Units
and Series B Preference Units (allocated between each such series
and among the Limited Partners holding Units of each such series
as provided below in this Section 5.1(b)(i)(A)) until Net Losses
are allocated to each Unit pursuant to this Section 5.1(b)(i)(A)
for the current taxable year and all previous taxable years in an
amount equal to the Net Income allocated to such Unit pursuant to
Section 5.1(a)(iv) for all previous taxable years. As among the
Limited Partners holding each of the Series A Common Units,
Series A Preference Units and Series B Preference Units, any
distributions under this Section 5.1(b)(i)(A) shall be allocated
in proportion to the Net Income allocated to one of each such
Units pursuant to Section 5.1(a)(iv) for all previous taxable
years, and as among the Limited Partners holding a particular
series of Units, such distributions shall be allocated in the
proportion that the respective number of Units in such series
held by them bears to the total number of Units in such series
then Outstanding;
(B) Second, 1% to the General Partner and 99% to the Limited
Partners holding Series A Common Units, in the proportion that
the respective number of Series A Common Units held by them bears
to the total number of Series A Common Units then Outstanding,
provided that Net Losses shall not be allocated pursuant to this
Section 5.1(b)(ii) to the extent that such allocation would cause
any Limited Partner to have a deficit balance in its Adjusted
Capital Account at the end of such taxable period (or increase
any existing deficit balance in its Adjusted Capital Account);
(C) Third, 1% to the General Partner and 99% to the Limited
Partners holding Series A Preference Units and Series B
Preference Units (allocated between each such series and among
the Limited Partners holding Units of each such series as
provided below in this Section 5.1(b)(i)(C)), provided that Net
Losses shall not be allocated pursuant to this Section 5.1(b)(i)
to the extent that such allocation would cause any Limited
Partner to have a deficit balance in its Adjusted Capital Account
at the end of such taxable period (or increase any existing
deficit balance in its Adjusted Capital Account). As among the
Limited Partners holding the Series A Preference Units and the
Limited Partners holding the Series B Preference Units, any
distributions under this Section 5.1(b)(i)(C) shall be allocated
based on their respective Preference Unit Sharing Ratios, and as
among the Limited Partners holding a particular series of Units,
such distributions shall be allocated in the proportion that the
respective number of Units in such series held by them bears to
the total number of Units in such series then Outstanding; and
(D) Fourth, the balance, if any, 100% to the General Partner.
(ii) While no Series A Preference Units are Outstanding. During
any period in which no Series A Preference Units are outstanding:
(A) First, 1% to the General Partner and 99% to the Limited
Partners holding Series A Common Units and Series B Preference
Units (allocated between each such series and among the Limited
Partners holding Units of each such series as provided below in
this Section 5.1(b)(ii)(A)) until Net Losses are allocated to
each Unit pursuant to this Section 5.1(b)(ii)(A) for the current
taxable year and all previous taxable years in an amount equal to
the Net Income allocated to such Unit pursuant to
Section 5.1(a)(iv) for all previous taxable years. As among the
Limited Partners holding the Series A Common Units and the
Limited Partners holding the Series B Preference Units, any
distributions under this Section 5.1(b)(ii)(A) shall be allocated
in proportion to the amounts of Net Income allocated to the
Limited Partners holding such Units pursuant to
Section 5.1(a)(iv) for all previous taxable years, and as among
the Limited Partners holding a particular series of Units, such
distributions shall be allocated in the proportion that the
respective number of Units in such series held by them bears to
the total number of Units in such series then Outstanding;
(B) Second, 1% to the General Partner and 99% to the Limited
Partners holding Series A Common Units, in the proportion that
the respective number of Series A Common Units held by them bears
to the total number of Series A Common Units then Outstanding,
provided that Net Losses shall not be allocated pursuant to this
Section 5.1(b)(ii)(B) to the extent that such allocation would
cause any Limited Partner holding Series A Common Units to have a
deficit balance in its Adjusted Capital Account at the end of
such taxable year (or increase any existing deficit balance in
its Adjusted Capital Account); and
(C) Third, 1% to the General Partner and 99% to the Limited
Partners holding Series B Preference Units in the proportion that
the respective number of Series B Preference Units held by them
bears to the total number of Series B Preference Units then
Outstanding, provided that Net Losses shall not be allocated
pursuant to this Section 5.1(b)(i)(C) to the extent that such
allocation would cause any Limited Partner holding Series B
Preference Units to have a deficit balance in its Adjusted
Capital Account at the end of such taxable year (or increase any
existing deficit balance in its Adjusted Capital Account
balance); and
(D) Fourth, the balance, if any, 100% to the General Partner.
(c) Net Termination Gains and Losses. After giving effect to
the allocations in Section 4.2 and the special allocations set
forth in Sections 5.1(d) and 5.1(e), all items of income, gain,
loss and deduction taken into account in computing Net
Termination Gain or Net Termination Loss for such taxable period
shall be allocated in the same manner as such Net Termination
Gain or Net Termination Loss is allocated hereunder. All
allocations under this Section 5.1(c) shall be made after Capital
Account balances have been adjusted by all other allocations
provided under this Section 5.1 and after all distributions of
Available Cash provided under Sections 5.4 and 5.5 have be made
with respect to such taxable period.
(i) If a Net Termination Gain is recognized, such Net
Termination Gain shall be allocated between the General Partner
and the Limited Partners in the following manner (and the
Adjusted Capital Accounts of the Partners shall be increased by
the amount so allocated in each of the following subclauses, in
the order listed, before an allocation is made pursuant to the
next succeeding subclause):
(A) first, to each Partner having a deficit balance in its
Adjusted Capital Account in the proportion that such deficit
balance bears to the total deficit balances in the Adjusted
Capital Accounts of all Partners, until each such Partner has
been allocated Net Termination Gain equal to any such deficit
balance in its Adjusted Capital Account;
(B) second, 99% to the Limited Partners holding Series A
Preference Units and Series B Preference Units (allocated between
each such series and among the Limited Partners holding
Preference Units of each such series as provided below in this
Section 5.1(c)(i)(B)) and 1.0% to the General Partner until the
Adjusted Capital Account in respect of each Series A Preference
Unit and Series B Preference Unit then Outstanding is equal to,
as applicable, (aa) the sum of the Unrecovered Capital in respect
of such Series A Preference Unit plus any then Series A
Preference Unit Cumulative Deficiency or (bb) the Series B
Preference Unit Liquidation Value. As between the Limited
Partners holding Series A Preference Units and the Limited
Partners holding Series B Preference Units, any allocation under
this Section 5.1(c)(i)(B) shall be made based on the Preference
Unit Sharing Ratios, and as among the Limited Partners holding a
particular series of Preference Units, such distributions shall
be allocated in the proportion that the respective number of
Preference Units in such series held by them bears to the total
number of Preference Units in such series then Outstanding;
(C) third, 99% to Limited Partners holding Series A Common
Units, in the proportion that the respective number of Series A
Common Units held by them bears to the total number of Series A
Common Units then Outstanding, and 1.0% to the General Partner
until the Adjusted Capital Account in respect of each Series A
Common Unit then Outstanding is equal to the Unrecovered Capital
with respect to such Series A Common Unit;
(D) fourth, (aa) if the Net Termination Gain is recognized prior
to the termination of the Series A Preference Unit Preference
Period, 99% to all Limited Partners holding Series A Preference
Units and Series A Common Units, in the proportion that the
respective number of such Units held by them bears to the total
number of such Units then Outstanding, or (bb) if the Net
Termination Gain is recognized following the termination of the
Series A Preference Unit Preference Period, 99% to all Limited
Partners holding Series A Common Units, in the proportion that
the respective number of Series A Common Units held by them bears
to the total number of Series A Common Units then Outstanding,
and 1% to the General Partner, until there has been allocated an
amount per Series A Common Unit equal to (yy) the excess of the
First Target Distribution per Unit over the Minimum Quarterly
Distribution for each quarter of the Partnership's existence,
less (zz) the amount per Unit of any distributions in respect of
such Series A Common Units (including any distributions in
respect of such Series A Common Units prior to conversion of such
Units from Series A Preference Units) pursuant to Sections 5.4
and 5.5;
(E) fifth, (aa) if the Net Termination Gain is recognized prior
to the termination of the Series A Preference Unit Preference
Period, 85.87% to all Limited Partners holding Series A
Preference Units and Series A Common Units, in the proportion
that the respective number of such Units held by them bears to
the total number of such Units then Outstanding, or (bb) if the
Net Termination Gain is recognized following the termination of
the Series A Preference Unit Preference Period, 85.87% to all
Limited Partners holding Series A Common Units, in the proportion
that the respective number of Series A Common Units held by them
bears to the total number of Series A Common Units then
Outstanding, and 14.13% to the General Partner, until there has
been allocated an amount per relevant Unit equal to (yy) the
excess of the Second Target Distribution per Unit over the First
Target Distribution per Unit for each quarter of the
Partnership's existence, less (zz) the amount per Unit of any
distributions in respect of such Series A Common Units (including
any distributions in respect of such Series A Common Units prior
to conversion of such Units from Series A Preference Units)
pursuant to Sections 5.4 and 5.5;
(F) sixth, (aa) if the Net Termination Gain is recognized prior
to the termination of the Series A Preference Unit Preference
Period, 75.77% to all Limited Partners holding Series A
Preference Units and Series A Common Units, in the proportion
that the respective number of such Units held by them bears to
the total number of such Units then Outstanding, or (bb) if the
Net Termination Gain is recognized following the termination of
the Series A Preference Unit Preference Period, 75.77% to all
Limited Partners holding Series A Common Units, in the proportion
that the respective number of Series A Common Units held by them
bears to the total number of Series A Common Units then
Outstanding, and 24.23% to the General Partner, until there has
been allocated an amount per relevant Unit equal to (yy) the
excess of the Second Target Distribution per Unit over the First
Target Distribution per Unit for each quarter of the
Partnership's existence, less (zz) the amount per Unit of any
distributions in respect of such Series A Common Units (including
any distributions in respect of such Series A Common Units prior
to conversion of such Units from Series A Preference Units)
pursuant to Sections 5.4 and 5.5; and
(G) seventh, the balance, if any, (aa) if the Net Termination
Gain is recognized prior to the termination of the Series A
Preference Unit Preference Period, 50.51% to all Limited Partners
holding Series A Preference Units and Series A Common Units, in
the proportion that the respective number of such Units held by
them bears to the total number of such Units then Outstanding, or
(bb) if the Net Termination Gain is recognized following the
termination of the Series A Preference Unit Preference Period, to
all Limited Partners holding Series A Common Units, in the
proportion that the respective number of Series A Common Units
held by them bears to the total number of Series A Common Units
then Outstanding, and 49.49% to the General Partner.
(ii) if a Net Termination Loss is recognized, such Net
Termination Loss shall be allocated to the Partners in the
following manner:
(A) first, to all Partners in proportion to the positive
balances in their Adjusted Capital Accounts (or, if subsequent to
the Series A Preference Unit Preference Period, 100% to the
Limited Partners holding Series A Preference Units and Series B
Preference Units, in proportion to the positive balances in their
Adjusted Capital Accounts) until the Adjusted Capital Accounts of
holders of Series A Preference Units are reduced to the amount of
their Unrecovered Capital plus any arrearages with respect
thereto and the Adjusted Capital Accounts of holders of Series B
Preference Units are reduced to their Series B Preference Unit
Liquidation Value;
(B) second, 1% to the General Partner and 99% to the Limited
Partners holding Series A Common Units, in proportion to, and to
the extent of, the positive balances in their Adjusted Capital
Accounts until all such balances are reduced to zero;
(C) third, 100% to the Limited Partners holding Series A
Preference Units and Series B Preference Units, in proportion to,
and to the extent of, the positive balances in their Adjusted
Capital Accounts until all such balances are reduced to zero; and
(D) fourth, the balance, if any, 100% to the General Partner.
(d) Special Allocations. Notwithstanding any other provisions
of this Section 5.1 (other than Section 5.1(e)), the following
special allocation shall be made for such taxable period:
(i) Priority Allocations. (A) If the amount of cash or the Net
Agreed Value of any property distributed (except cash or property
distributed pursuant to Section 14.3 or 14.4) to any Limited
Partner during a taxable year is greater (on a per Unit basis)
than the amount of cash or the Net Agreed Value of property
distributed to the other Limited Partners (on a per Unit basis),
then (1) each Limited Partner receiving such greater cash or
property distribution shall be allocated gross income in an
amount equal to the product of (x) the amount by which the
distribution (on a per Unit basis) to such Limited Partner
exceeds the distribution (on a per Unit basis) to the Limited
Partners receiving the smallest distribution and (y) the number
of Units owned by the Limited Partner receiving the greater
distribution and (2) the General Partner shall be allocated gross
income in an amount equal to one-ninety-ninth (1/99) of the sum
of the amounts allocated in clause (1) above.
(B) All or a portion of the remaining items of
Partnership gross income or gain for the taxable period if
any, shall be allocated 100% to the General Partner (or its
assignee) until the aggregate amount of such items allocated
to the General Partner (or its assignee) under this
paragraph (d)(i)(B) for the current taxable period and all
previous taxable periods is equal to the cumulative amount
of all Incentive Distributions made to the General Partner
(or its assignee) from the Closing Date to a date 45 days
after the end of the current taxable period.
(ii) Nonrecourse Liabilities. For purposes of Treasury
Regulation Section 1.752-3(a)(3), the Partners agree that
Nonrecourse Liabilities of the Partnership in excess of the sum
of (A) the amount of Partnership Minimum Gain and (B) the total
amount of Nonrecourse Built-in Gain shall be allocated among the
Partners 49.49% to the General Partner and 50.51% to all Limited
Partners in the proportion that the respective number of Units
held by them bears to the total number of Units then outstanding.
(iii) Discretionary Allocation. (A) Notwithstanding any other
provision of Section 5.1(a), (b) or (c), the Agreed Allocations
shall be adjusted so that to the extent possible, the net amount
of items of income, gain, loss and deduction allocated to the
Partner pursuant to the Required Allocations and the Agreed
Allocation, together, shall be equal to the net amount of such
item that would have been allocated to each such Partner under
the Agreed Allocations had there been no Required Allocations;
provided, however, that for purposes of applying this Section
5.1(d)(iii)(A), it shall be assumed that all chargebacks pursuant
to Sections 5.1(e)(i) and (ii) have occurred.
(B) The General Partner shall have reasonable
discretion, with respect to each taxable year, to (1) apply
the provisions of Section 5.1(d)(iii)(A) in whatever fashion
as is most likely to minimize the economic distortions that
might otherwise result from the Required Allocations, and
(2) divide all allocations pursuant to Section
5.1(d)(iii)(A) among the Partners in a manner that is likely
to minimize such economic distortions.
(e) Required Allocations. Notwithstanding any other provision of
this Section 5.1, the following special allocations shall be made
for such taxable period:
(i) Partnership Minimum Gain Chargeback. Notwithstanding the
other provisions of this Section 5.1, except as provided in
Treasury Regulation Sections 1.704-2(f)(2) through (5), if there
is a net decrease in Partnership Minimum Gain during any
Partnership taxable period, each Partner shall be allocated items
of Partnership income and gain for such period (and, if
necessary, subsequent periods) in the manner and amounts provided
in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and
1.704-2(j)(2)(i), or any successor provisions. For purposes of
this Section 5.1(e), each Partner's Adjusted Capital Account
balance shall be determined, and the allocation of income or gain
required hereunder shall be effected, prior to the application of
any other allocations pursuant to this Section 5.1 with respect
to such taxable period (other than an allocation pursuant to
Sections 5.1(e)(v) or 5.1(e)(vi)).
(ii) Chargeback of Minimum Gain Attributable to Partner
Nonrecourse Debt. Notwithstanding the other provisions of this
Section 5.1 (other than 5.1(e)(i)), except as provided in
Treasury Regulation Section 1.704-2(i)(4), if there is a net
decrease in Minimum Gain Attributable to Partner Nonrecourse Debt
during any Partnership taxable period any Partner with a share of
Minimum Gain Attributable to Partner Nonrecourse Debt at the
beginning of such taxable period shall be allocated items of
Partnership income and gain for such period (and if necessary,
subsequent periods) in the manner and amounts provided in
Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii),
or any successor provisions. For purposes of this Section 5.1,
such Partner's Adjusted Capital Account balance shall be
determined and the allocation of income or gain required
hereunder shall be effected, prior to the application of any
other allocations pursuant to this Section 5.1(e), other than
Section 5.1(e)(i) (and other than an allocation pursuant to
Sections 5.1(e)(v) or 5.1(e)(vi)), with respect to such taxable
period.
(iii) Qualified Income Offset. In the event any Limited
Partner unexpectedly receives adjustments, allocations or
distributions described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or
1.704-1(b)(2)(ii)(d)(6), items of Partnership income and gain
shall be specifically allocated to such Partner in an amount and
manner sufficient to eliminate, to the extent required by the
Treasury Regulations promulgated under Section 704(b) of the
Code, the deficit balance if any, in its Adjusted Capital Account
created by such adjustments, allocations or distributions as
quickly as possible unless such deficit balance is otherwise
eliminated pursuant to Section 5.1(e)(i) or 5.1(e)(ii).
(iv) Gross Income Allocations.
(A) In the event any Partner has a deficit balance in its
Adjusted Capital Account at the end of any Partnership taxable
period, such Partner shall be specifically allocated items of
Partnership gross income and gain in the amount of such excess as
quickly as possible; provided, that an allocation pursuant to
this Section 5.1(e)(iv)(A) shall be made only if and to the
extent that such Partner would have a deficit balance in its
Adjusted Capital Account after all other allocations provided in
this Section 5.1 have been tentatively made as if this Section
5.1(e)(iv)(A) was not in this Agreement.
(B) If at the end of any Partnership taxable period, after all
other allocations provided in this Section 5.1 have been
tentatively made as if this Section 5.1(e)(iv)(B) was not in this
Agreement, the total amount allocated in respect of any Series B
Preference Unit under Section 5.1(a)(iv) during the period from
the Series B Preference Unit Issuance Date through the date of
such allocation is less than the total of all amounts distributed
in respect of such Series B Preference Unit made during such
period pursuant to Sections 5.5(a) and (b), then the Limited
Partners holding Series B Preference Units shall be specifically
allocated, as quickly as possible (but after the requirements of
Section 5.1(e)(iv)(A) have been met), items of Partnership gross
income and gain such that the total amount allocated in respect
of any Series B Preference Unit under Section 5.1(a)(iv) during
the period from the Series B Preference Unit Issuance Date
through the date of such allocation is equal to the total of all
amounts distributed in respect of such Series B Preference Unit
during such period pursuant to Sections 5.5(a) and (b).
(v) Nonrecourse Deductions. Nonrecourse Deductions for any
taxable period shall be allocated to the Partners in the same
manner as Net Income is allocated pursuant to Section 5.1(a)(iv).
If the Managing General Partner determines in its good faith
discretion that the Partnership's Nonrecourse Deductions must be
allocated in a different ratio to satisfy the safe harbor
requirements of the Treasury Regulations promulgated under
Section 704(b) of the Code, the General Partner is authorized,
upon notice to the Limited Partners, to revise the prescribed
ratio to the numerically closest ratio which does satisfy such
requirements.
(vi) Partner Nonrecourse Deductions. Partner Nonrecourse
Deductions for any taxable period shall be allocated 100% to the
Partner that bears the Economic Risk of Loss for such Partnership
Nonrecourse Debt to which such Partner Nonrecourse Deductions are
attributable in accordance with Treasury Regulation Section
1.704-2(i). If more than one Partner bears the Economic Risk of
Loss with respect to a Partner Nonrecourse Debt such Partner
Nonrecourse Deductions attributable thereto shall be allocated
between or among such Partners in accordance with the ratios in
which they share such Economic Risk of Loss.
5.2 Allocations for Tax Purposes.
(a) Except as otherwise provided herein, for federal income tax
purposes, each item of income, gain, loss and deduction which is
recognized by the Partnership for federal income tax purposes
shall be allocated among the Partners in the same manner as its
correlative item of "book," income, gain, loss or deduction is
allocated pursuant to Section 5.1.
(b) In an attempt to eliminate Book-Tax Disparities attributable
to a Contributed Property or Adjusted Property, items of income,
gain, loss, depreciation, amortization and cost recovery
deductions shall be allocated for federal income tax purposes
among the Partners as follows:
(i) (A) In the case of a Contributed Property, such items
attributable thereto shall be allocated among the Partners in the
manner provided under Section 704(c) of the Code that takes into
account the variation between the Agreed Value of such property
and its adjusted basis at the time of contribution; and (B)
except as otherwise provided in Section 5.2(b)(iii), any item of
Residual Gain or Residual Loss attributable to a Contributed
Property shall be allocated among the Partners in the same manner
as its correlative item of "book" gain or loss is allocated
pursuant to Section 5.1.
(ii) (A) In the case of an Adjusted Property, such items shall
(1) first, be allocated among the Partners in a manner consistent
with the principles of Section 704(c) of the Code to take into
account the Unrealized Gain or Unrealized Loss attributable to
such property and the allocations thereof pursuant to Section
4.6(d)(i) or (ii), and (2) second, in the event such property was
originally a Contributed Property, be allocated among the
Partners in a manner consistent with Section 5.2(b)(i)(A); and
(B) except as otherwise provided in Section 5.2(b)(iii), any item
of Residual Gain or Residual Loss attributable to an Adjusted
Property shall be allocated among the Partners in the same manner
as its correlative item of "book" gain or loss is allocated
pursuant to Section 5.1.
(iii) Any items of income, gain, loss or deduction otherwise
allocable under Section 5.2(b)(i)(B) or 5.2(b)(ii)(B) shall be
subject to allocation by the General Partner in a manner designed
to eliminate, to the maximum extent possible, Book-Tax
Disparities in a Contributed Property or Adjusted Property
otherwise resulting from the application of the "ceiling"
limitation (under Section 704(c) of the Code or Section 704(c)
principles) to the allocations provided under Section
5.2(b)(i)(A) or 5.2(b)(ii)(A).
(c) For the proper administration of the Partnership or for the
preservation of uniformity of the Units (or any class or classes
thereof), the General Partner shall have sole discretion to (i)
adopt such conventions as it deems appropriate in determining the
amount of depreciation amortization and cost recovery deductions;
(ii) make special allocations for federal income tax purposes of
income (including, without limitation, gross income) or
deductions; and (iii) amend the provisions of this Agreement as
appropriate (x) to reflect the proposal or promulgation of
Treasury Regulations under Section 704(b) or Section 704(c) of
the Code or (y) otherwise to preserve or achieve uniformity of
the Units (or any class or classes thereof). The General Partner
may adopt such conventions, make such allocations and make such
amendments to this Agreement as provided in this Section 5.2(c)
only if such conventions, allocations or amendments would not
have a material adverse effect on the Partners, the holders of
any class or classes of Units issued and Outstanding of the
Partnership, and if such allocations are consistent with the
principles of Section 704 of the Code.
(d) The General Partner in its sole discretion may determine to
depreciate the portion of an adjustment under Section 743(b) of
the Code attributable to unrealized appreciation in any Adjusted
Property (to the extent of the unamortized Book-Tax Disparity)
using a predetermined rate derived from the depreciation method
and useful life applied to the Partnership's common basis of such
property, despite the inconsistency of such approach with
Proposed Treasury Regulation Section 1.168-2(n) and Treasury
Regulation Section 1.167(c)-1(a)(6). If the General Partner
determines that such reporting position cannot reasonably be
taken, the General Partner may adopt a depreciation convention
under which all purchasers acquiring Units in the same month
would receive depreciation, based upon the same applicable rate
as if they had purchased a direct interest in the Partnership's
property. If the General Partner chooses not to utilize such
aggregate method the General Partner may use any other reasonable
depreciation convention to preserve the uniformity of the
intrinsic tax characteristics of any Units that would not have a
material adverse effect on the Limited Partners or the Record
Holders of any class or classes of Units. In addition, for
purposes of computing the adjustments under Section 743(b) of the
Code, the General Partner shall be authorized (but not required)
(i) to adopt a convention whereby the price paid by a transferee
of Units will be deemed to be the lowest quoted trading price of
the Units on any National Securities Exchange on which such Units
are traded during the calendar month in which such transfer is
deemed to occur pursuant to Section 5.2(g) without regard to the
actual price paid by such transferee and (ii) to treat the amount
of any Section 743(b) adjustment with respect to properties of
the non-corporate Operating Companies and Joint Ventures as being
equal to the Section 743(b) adjustment attributable to the
partnership interest in such Operating Companies and Joint
Ventures.
(e) Any gain allocated to the Partners upon the sale or other
taxable disposition of any Partnership asset shall, to the extent
possible, after taking into account other required allocations of
gain pursuant to this Section 5.2 be characterized as Recapture
Income in the same proportions and to the same extent as such
Partners (or their predecessors in interest) have been allocated
any deductions directly or indirectly giving rise to the
treatment of such gains as Recapture Income.
(f) All items of income, gain, loss, deduction and credit
recognized by the Partnership for federal income tax purposes and
allocated to the Partners in accordance with the provisions
hereof shall be determined without regard to any election under
Section 754 of the Code which may be made by the Partnership;
provided, however, that such allocations once made, shall be
adjusted as necessary or appropriate to take into account those
adjustments permitted or required by Sections 734 and 743 of the
Code.
(g) Each item of Partnership income, gain, loss and deduction
attributable to a transferred Partnership Interest of the General
Partner or to transferred Units shall, for federal income tax
purposes, be determined on an annual basis and prorated on a
monthly basis and shall be allocated to the Partners as of the
close of the New York Stock Exchange on the last day of the
preceding month; provided, however, that (i) except as otherwise
provided in clause (ii), such items for the period beginning on
the Closing Date and ending on the last day of the month in which
the Closing Date occurs shall be allocated to Partners as of the
close of the New York Stock Exchange on the last day of that it
month or (ii) if the Underwriters' over-allotment option is
exercised, such items for the period beginning on the Closing
Date and ending on the last day of the month in which the Option
Closing Date (as defined in the Underwriting Agreement) occurs
shall be allocated to the Partners as of the close of the New
York Stock Exchange on the last day of that month; and provided
further, that gain or loss on a sale or other disposition of any
assets of the Partnership other than in the ordinary course of
business shall be allocated to the Partners as of the opening of
the New York Stock Exchange on the first Business Day of the
month in which such gain or loss is recognized for federal income
tax purposes. The General Partner may revise, alter or otherwise
modify such methods of allocation as it determines necessary to
the extent permitted or required by Section 706 of the Code and
the regulations or ruling promulgated thereunder.
(h) Allocations that would otherwise be made to a Limited
Partner under the provisions of this Article V shall instead be
made to the beneficial owner of Units held by a nominee in any
case in which the nominee has furnished the identity of such
owner to the Partnership in accordance with Section 6031(c) of
the Code or any other method acceptable to the General Partner in
its sole discretion.
5.3 Requirement and Characterization of Distributions
. Within 45 days following the end of each calendar quarter, an
amount equal to 100% of Available Cash with respect to such
quarter (or period) shall be distributed in accordance with this
Article V by the Partnership to the Partners, as of the Record
Date for such distribution selected by the General Partner in its
reasonable discretion. The immediately preceding sentence shall
not modify in any respect the provisions of Section 4.2
regulating the distribution of any interest or other profit on
the initial Contributions referred to therein. All amounts of
Available Cash distributed by the Partnership on any date from
any source (other than amounts paid or distributed pursuant to
Section 4.2) shall be deemed to be Cash from Operations until the
aggregate amount of all Available Cash theretofore distributed by
the Partnership to Partners pursuant to Sections 5.4 and 5.5
equals the aggregate amount of all Cash from Operations of the
Partnership from the Partnership Inception through the end of the
calendar quarter immediately preceding such distribution. Any
remaining amounts of Available Cash distributed by the
Partnership on such date (other than amounts paid or distributed
pursuant to Section 4.2) shall, except as otherwise provided in
Section 5.7, be deemed to be Cash from Interim Capital
Transactions. With respect to any calendar quarter included in
the period beginning on (and including) the day immediately
following the last day of the Series A Preference Unit Preference
Period and ending on (and including) the day immediately prior to
the Series B Preference Unit Preference Date, the General Partner
may decide (in its sole discretion) to make a distribution in
respect of each Series B Preference Unit then Outstanding (the
amount of such distribution (a "Series B Preference Unit
Discretionary Distribution Amount"); provided, however, that the
Series B Preference Unit Discretionary Distribution Amount for
any such calendar quarter shall not exceed an amount equal to the
Series B Preference Unit Deficiency on the last day of such
calendar quarter.
5.4 Distributions During Series A Preference Unit Preference
Period
Available Cash with respect to any calendar quarter within the
Series A Preference Unit Preference Period that is deemed to be
Cash from Operations pursuant to the provisions of Section 5.3 or
5.7 and, to the extent necessary to make the payments in
subsection (a) below, the Reserve Amount shall be applied as
follows:
(a) First, 99% to all Limited Partners holding Series A
Preference Units, in the proportion that the respective number of
Series A Preference Units held by them bears to the total number
of Series A Preference Units then Outstanding, and 1.0% to the
General Partner until there has been distributed in respect of
each Series A Preference Unit then Outstanding an amount equal to
the Minimum Quarterly Distribution;
(b) Second, 99% to all Limited Partners holding Series A
Preference Units, in the proportion that the respective number of
Series A Preference Units held by them bears to the total number
of Series A Preference Units then Outstanding, and 1.0% to the
General Partner until there has been distributed in respect of
each Series A Preference Unit then Outstanding an amount equal to
any Series A Preference Unit Cumulative Deficiency existing on
the last day of such quarter;
(c) Third, 99% to all Limited Partners holding Series A Common
Units, in the proportion that the respective number of Series A
Common Units held by them bears to the total number of Series A
Common Units then Outstanding, and 1.0% to the General Partner
until there has been distributed in respect of each Series A
Common Unit then outstanding an amount equal to the Minimum
Quarterly Distribution;
(d) Fourth, 99% to all Limited Partners holding Series A
Preference Units and Series A Common Units, in the proportion
that the respective number of such Units held by them bears to
the number of such Units then Outstanding, and 1.0% to the
General Partner until there has been distributed in respect of
each such Unit then Outstanding an amount equal to the excess of
the First Target Distribution over the Minimum Quarterly
Distribution;
(e) Fifth, 85.87% to all Limited Partners holding Series A
Preference Units and Series A Common Units, in the proportion
that the respective number of such Units held by them bears to
the number of such Units then Outstanding and 14.13% to the
General Partner until there has been distributed in respect of
each such Unit then Outstanding an amount equal to the excess of
the Second Target Distribution over the First Target
Distribution; and
(f) Sixth, 75.77% to all Limited Partners holding Series A
Preference Units and Series A Common Units, in the proportion
that the respective number of such Units held by them bears to
the number of such Units then Outstanding, and 24.23% to the
General Partner until there has been distributed in respect of
each such Unit then Outstanding an amount equal to the excess of
the Third Target Distribution over the Second Target
Distribution; and
(g) Seventh, 50.51% to all Limited Partners holding Series A
Preference Units and Series A Common Units, in the proportion
that the respective number of such Units held by them bears to
the number of such Units then Outstanding, and 49.49% to the
General Partner,provided, however, that if the Minimum Quarterly
Distribution, the First Target Distribution, the Second Target
Distribution and the Third Target Distribution have been reduced
to zero pursuant to Section 5.9(a)(ii), then distributions of
Available Cash that is deemed to be Cash from Operations with
respect to any quarter will be made in accordance with Section
5.4(g) above.
5.5 Distributions With Respect to Calendar Quarters After the
Series A Preference Unit Preference Period.
(a) Distributions With Respect to Calendar Quarters After the
Series A Preference Unit Preference Period and Before the Series
B Preference Unit Preference Date. Available Cash with respect to
any calendar quarter included in the period beginning on (and
including) the day immediately following the Series A Preference
Unit Preference Period and ending on (and including) the day
immediately before the Series B Preference Unit Preference Date
that is deemed to be Cash from Operations pursuant to the
provisions of Section 5.3 or 5.7 and, to the extent necessary to
make the payments in subsection (i) below, the Reserve Amount
shall be applied as follows:
(i) First, 99% to all Limited Partners holding Series A
Preference Units and Series B Preference Units (allocated between
each such series and among the Limited Partners holding
Preference Units of each such series as provided below in this
Section 5.5(a)(i)) and 1.0% to the General Partner until there
has been distributed in respect of each Series A Preference Unit
then Outstanding an amount equal to the Minimum Quarterly
Distribution. As between the Limited Partners holding Series A
Preference Units and the Limited Partners holding Series B
Preference Units, any distributions under this Section 5.5(a)(i)
shall be allocated (x) first, based on the Preference Unit
Sharing Ratios until there has been distributed in respect of
each Series B Preference Unit then Outstanding an amount up to
(but not in excess of) the Series B Preference Unit Discretionary
Distribution Amount and (y) then, 100% to the Series A Preference
Units. As among the Limited Partners holding a particular series
of Preference Units, such distributions shall be allocated in the
proportion that the respective number of Preference Units in such
series held by them bears to the total number of Preference Units
in such series then Outstanding;
(ii) Second, 99% to all Limited Partners holding Series A
Preference Units and Series B Preference Units (allocated between
each such series and among the holders of each such series as
provided below in this Section 5.5(a)(ii)) and 1.0% to the
General Partner until there has been distributed in respect of
each Series A Preference Unit then Outstanding a total amount
under this Section 5.5(a) equal to the sum of the Minimum
Quarterly Distribution and any Series A Preference Unit
Cumulative Deficiency existing on the last day of such calendar
quarter. As between the Limited Partners holding Series A
Preference Units and the Limited Partners holding Series B
Preference Units, any distributions under this Section 5.5(a)(ii)
shall be allocated (x) first, based on the Preference Unit
Sharing Ratios until there has been distributed in respect of
each Series B Preference Unit then Outstanding a total amount
under this Section 5.5(a) up to (but not in excess of) the Series
B Preference Unit Discretionary Distribution Amount on the last
day of such calendar quarter, and (y) then, 100% to the Series A
Preference Units. As among the Limited Partners holding a
particular series of Preference Units, such distributions shall
be allocated in the proportion that the respective number of
Preference Units in such series held by them bears to the total
number of Preference Units in such series then Outstanding;
(iii) Third, 99% to all Limited Partners holding Series B
Preference Units, in the proportion that the respective number of
Series B Preference Units held by them bears to the total number
of Series B Preference Units then Outstanding, and 1.0% to the
General Partner until there has been distributed in respect of
each Series B Preference Unit then Outstanding a total amount
pursuant to this Section 5.5(a) equal to the Series B Preference
Unit Discretionary Distribution Amount for such calendar quarter;
(iv) Fourth, 99% to all Limited Partners holding Series A Common
Units, in the proportion that the respective number of Series A
Common Units held by them bears to the total number of Series A
Common Units then Outstanding, and 1.0% to the General Partner
until there has been distributed in respect of each Series A
Common Unit then Outstanding an amount equal to the Minimum
Quarterly Distribution;
(v) Fifth, 99% to all Limited Partners holding Series A Common
Units, in the proportion that the respective number of Series A
Common Units held by them bears to the total number of Series A
Common Units then Outstanding, and 1.0% to the General Partner
until there has been distributed in respect of each Series A
Common Unit then Outstanding an amount equal to the excess of the
First Target Distribution over the Minimum Quarterly
Distribution;
(vi) Sixth, 85.87% to all Limited Partners holding Series A
Common Units, in the proportion that the respective number of
Series A Common Units held by them bears to the total number of
Series A Common Units then Outstanding, and 14.13% to the General
Partner until there has been distributed in respect of each
Series A Common Unit then Outstanding an amount equal to the
excess of the Second Target Distribution over the First Target
Distribution;
(vii) Seventh, 75.77% to all Limited Partners holding Series
A Common Units, in the proportion that the respective number of
Series A Common Units held by them bears to the number of Series
A Common Units then Outstanding, and 24.23% to the General
Partner until there has been distributed in respect of each
Series A Common Unit then Outstanding an amount equal to the
excess of the Third Target Distribution over the Second Target
Distribution; and
(viii) Eighth, 50.51% to all Limited Partners holding Series A
Common Units, in the proportion that the respective number of
Series A Common Units held by them bears to the total number of
Series A Common Units then Outstanding, and 49.49% to the General
Partner, provided, however, that (x) if the Minimum Quarterly
Distribution, the First Target Distribution, the Second Target
Distribution and the Third Target Distribution have been reduced
to zero pursuant to Section 5.9(a)(ii), then the Series A
Preference Units will receive no further distributions, shall be
treated as if they had been redeemed and shall cease to be
Outstanding for all purposes; and therefore, distributions of
Available Cash that is deemed to be Cash from Operations with
respect to any quarter will be made in accordance with Sections
5.5(a)(iii)-(vii) above and (y) if the Series B Preference Unit
Liquidation Value has been reduced to zero pursuant to Section
5.9(a)(ii), then the Series B Preference Units will receive no
further distributions, shall be treated as if they had been
redeemed and shall cease to be Outstanding for all purposes; and
therefore, distributions of Available Cash that is deemed to be
Cash from Operations with respect to any quarter will be made in
accordance with Sections 5.5(a)(vii) above.
(b) Distributions With Respect to Calendar Quarters After the
Series A Preference Unit Preference Period and On or After the
Series B Preference Unit Preference Date. Available Cash with
respect to any calendar quarter included in the period beginning
on (and including) the Series B Preference Unit Preference Date
that is deemed to be Cash from Operations pursuant to the
provisions of Section 5.3 or 5.7 and, to the extent necessary to
make the payments in subsection (i) below, the Reserve Amount
shall be applied as follows:
(i) First, 99% to all Limited Partners holding Series A
Preference Units and Series B Preference Units (allocated between
each such series and among the holders of each such series as
provided below in this Section 5.5(b)(i)) and 1.0% to the General
Partner until there has been distributed in respect of each
Series A Preference Unit then Outstanding an amount equal to the
Minimum Quarterly Distribution. As between the Limited Partners
holding Series A Preference Units and the Limited Partners
holding Series B Preference Units, any distributions under this
Section 5.5(b)(i) shall be allocated (x) first, based on the
Preference Unit Sharing Ratio until there has been distributed in
respect of each Series B Preference Unit then outstanding an
amount up to (but not in excess of) any Series B Preference Unit
Deficiency existing on the last day of such quarter, and (y)
then, 100% to the Series A Preference Units. As among the
Limited Partners holding a particular series of Preference Units,
such distributions shall be allocated in the proportion that the
respective number of Preference Units in such series held by them
bears to the total number of Preference Units in such series then
Outstanding;
(ii) Second, 99% to all Limited Partners holding Series A
Preference Units and Series B Preference Units (allocated between
each such series and among the holders of each such series as
provided below in this Section 5.5(b)(ii)) and 1.0% to the
General Partner until there has been distributed in respect of
each Series A Preference Unit then Outstanding a total amount
under this Section 5.5(b) equal to the sum of the Minimum
Quarterly Distribution and any Series A Preference Unit
Cumulative Deficiency existing on the last day of such quarter.
As between the Limited Partners holding Series A Preference Units
and the Limited Partners holding Series B Preference Units, any
distributions under this Section 5.5(b)(ii) shall be allocated
(x) first, based on the Preference Unit Sharing Ratio until there
has been distributed in respect of each Series B Preference Unit
then outstanding an amount up to (but not in excess of) the
Series B Preference Unit Deficiency on the last day of such
calendar quarter, and (y) then, 100% to the Series A Preference
Units. As among the Limited Partners holding a particular series
of Preference Units, such distributions shall be allocated in the
proportion that the respective number of Preference Units in such
series held by them bears to the total number of Preference Units
in such series then Outstanding;
(iii) Third, 99% to all Limited Partners holding Series B
Preference Units, in the proportion that the respective number of
Series B Preference Units held by them bears to the total number
of Series B Preference Units then Outstanding, and 1.0% to the
General Partner until there has been distributed in respect of
each Series B Preference Unit then Outstanding a total amount
under this Section 5.5(b) equal to the Series B Preference Unit
Deficiency for such calendar quarter;
(iv) Fourth, 99% to all Limited Partners holding Series A Common
Units, in the proportion that the respective number of Series A
Common Units held by them bears to the total number of Series A
Common Units then Outstanding, and 1.0% to the General Partner
until there has been distributed in respect of each Series A
Common Unit then Outstanding an amount equal to the Minimum
Quarterly Distribution;
(v) Fifth, 99% to all Limited Partners holding Series A Common
Units, in the proportion that the respective number of Series A
Common Units held by them bears to the total number of Series A
Common Units then Outstanding, and 1.0% to the General Partner
until there has been distributed in respect of each Series A
Common Unit then Outstanding an amount equal to the excess of the
First Target Distribution over the Minimum Quarterly
Distribution;
(vi) Sixth, 85.87% to all Limited Partners holding Series A
Common Units, in the proportion that the respective number of
Series A Common Units held by them bears to the total number of
Series A Common Units then Outstanding, and 14.13% to the General
Partner until there has been distributed in respect of each
Series A Common Unit then Outstanding an amount equal to the
excess of the Second Target Distribution over the First Target
Distribution;
(vii) Seventh, 75.77% to all Limited Partners holding Series
A Common Units, in the proportion that the respective number of
Series A Common Units held by them bears to the number of Series
A Common Units then Outstanding, and 24.23% to the General
Partner until there has been distributed in respect of each
Series A Common Unit then Outstanding an amount equal to the
excess of the Third Target Distribution over the Second Target
Distribution; and
(viii) Eighth, 50.51% to all Limited Partners holding Series A
Common Units, in the proportion that the respective number of
Series A Common Units held by them bears to the total number of
Series A Common Units then Outstanding, and 49.49% to the General
Partner,provided however, that (x) if the Minimum Quarterly
Distribution, the First Target Distribution, the Second Target
Distribution and the Third Target Distribution have been reduced
to zero pursuant to Section 5.9(a)(ii), then the Series A
Preference Units will receive no further distributions, shall be
treated as if they had been redeemed and shall cease to be Outstanding
for all purposes; and therefore, distributions of Available Cash that
is deemed to be Cash from Operations with respect to any quarter will
be made in accordance with Section 5.5(b)(iii)-(vii) above and (y) if
the Series B Preference Unit Liquidation Value has been reduced to
zero pursuant to Section 5.9(a)(ii), then the Series B
Preference Units will receive no further distributions, shall be
treated as if they had been redeemed and shall cease to be
Outstanding for all purposes; and therefore, distributions of
Available Cash that is deemed to be Cash from Operations with
respect to any quarter will be made in accordance with Sections
5.5(b)(vii) above.
5.6 Conversion of Series A Preference Units.
(a) From and after the end of the Series A Preference Unit
Preference Period, the Series A Preference Units shall cease to
participate with the Common Units in any distributions of
Available Cash constituting Cash from Operations in excess of the
Minimum Quarterly Distribution and any Series A Preference Unit
Cumulative Deficiency.
(b) On or within 45 days following the Series A Preference Unit
Conversion Date and each of the first and second anniversaries
thereof, the General Partner shall give the holders of Series A
Preference Units a written notice (a "Series A Preference Unit
Conversion Opportunity Notice"), to the effect that, for a 90-day
period commencing upon the mailing of such notice, the holders of
all Series A Preference Units shall have the right, subject to
the satisfaction of the Liquidity Condition, to convert their
Series A Preference Units into a like number of Common Units,
effective as of the date of the Series A Preference Unit
Conversion Opportunity Notice, by delivering to the General
Partner a written notice of their election to convert (the
"Series A Preference Unit Conversion Election Notice"); provided,
however, that any Series A Preference Units as to which a Series
A Preference Unit Conversion Election Notice is not received
during such 90-day period will remain as Series A Preference
Units. On or before the Series A Preference Unit Conversion
Date, or the first or second anniversary thereof, if applicable,
the General Partner shall file an application to list the Common
Units to be issued upon such conversion on the New York Stock
Exchange ("NYSE") and shall pursue such application in good
faith.
(c) If the Liquidity Condition is satisfied following the giving
of any Series A Preference Unit Conversion Opportunity Notice,
the conversion will become effective and the Series A Preference
Unit Preference Period will end as of the date of the Series A
Preference Unit Conversion Opportunity Notice. If the Liquidity
Condition is not satisfied following the giving of any Series A
Preference Unit Conversion Opportunity Notice and the holders of
less than a majority of the outstanding Series A Preference Units
elect to convert, no Series A Preference Units will be converted
and the Series A Preference Unit Preference Period will end as of
the date of such Series A Preference Unit Conversion Opportunity
Notice. If the holders of at least a majority of the outstanding
Series A Preference Units elect to convert following the giving
of any Series A Preference Unit Conversion Opportunity Notice,
but the Liquidity Condition is not satisfied, the Series A
Preference Unit Preference Period shall not end.
(d) Notwithstanding the foregoing, the Series A Preference Unit
Preference Period and the General Partner's obligation to give
additional Series A Preference Unit Conversion Opportunity
Notices, shall end, if not sooner ended pursuant to Section
5.6(c), as of the date of the third Series A Preference Unit
Conversion Opportunity Notice.
5.7 Distributions of Cash from Interim Capital Transactions
Available Cash that is deemed to be Cash from Interim Capital
Transactions shall be distributed, unless the provisions of
Section 5.3 require otherwise, 99% to all Limited Partners
holding Series A Common Units, Series A Preference Units Series B
Preference Units (allocated between each such series and among
the holders of each such series as provided below in this Section
5.7) and 1.0% to the General Partner until (a) a hypothetical
holder of a Series A Preference Unit acquired at the time of the
Series A Preference Unit Initial Offering has received with
respect to each Series A Preference Unit, from Partnership
Inception through such date, distributions of Available Cash that
are deemed to be Cash from Interim Capital Transactions in an
aggregate amount per Series A Preference Unit equal to the
Initial Unit Price, and (b) a hypothetical holder of a Series B
Preference Unit has received with respect to each Series B
Preference Unit, from the Series B Preference Unit Issuance Date
through such date, distributions of Available Cash that are
deemed to be Cash from Interim Capital Transactions in an
aggregate amount per Series B Preference Unit equal to the Series
B Preference Unit Liquidation Value. Thereafter, all Available
Cash shall be distributed as if it were Cash from Operations and
shall be distributed in accordance with Section 5.4 or 5.5,
whichever is applicable. As among the Limited Partners holding
Series A Common Units, Series A Preference Units and Series B
Preference Units, any distributions under this Section 5.7 shall
be allocated based on the Combined Unit Sharing Ratios. As among
the Limited Partners holding a particular series of Units, such
distributions shall be allocated in the proportion that the
respective number of Units in such series held by them bears to
the total number of Units in such series then Outstanding.
5.8 Definitions
As used herein,
(a) "Available Cash" means, with respect to any calendar
quarter:
(i) the sum of:
(A) all cash receipts of the Partnership during
such quarter from all sources (including distributions
of cash received from the Operating Companies); and
(B) any reduction in reserves (including the
Reserve Amount) established in prior quarters;
(ii) less the sum of.
(AA) all cash disbursements of the Partnership
during such quarter (excluding cash distribution to
Unitholders and to the General Partner, but including,
for example, disbursements for taxes of the Partnership
as an entity, debt service and capital expenditures);
(BB) the amount of any voluntary addition to the
Reserve Amount;
(CC) any reserves established and the amount of
any additions to such reserves in such quarter and in
such amounts as the General Partner determines to be
necessary or appropriate in its reasonable discretion
(x) to provide for the proper conduct of the business
of the Partnership or the Operating Companies
(including reserves for future capital expenditures) or
(y) to provide funds for distributions with respect to
any of the next four calendar quarters, in addition to
the Reserve Amount; and
(DD) any other reserves established in such
quarter in such amounts as the General Partner
determines in its reasonable discretion to be necessary
because the distribution of such amounts would be
prohibited by applicable law or by any loan agreement,
security agreement, mortgage, debt instrument or other
agreement or obligation to which the Partnership is a
party or by which it is bound or its assets are
subject.
Taxes paid by the Partnership on behalf of, or amounts
withheld with respect to, any of the Partners shall not be
considered cash disbursements of the Partnership which reduce
"Available Cash," but shall be deemed to be a distribution of
Available Cash to such Partners. Alternatively, in the
discretion of the General Partner, such taxes (if pertaining to
all Partners) may be considered to be cash disbursements of the
Partnership which reduce "Available Cash," but shall not deemed
to be a distribution of Available Cash to such Partners.
Notwithstanding the foregoing, "Available Cash" shall not
include any cash receipts or reductions in reserves or take into
account any disbursements made or reserves established after
commencement of the dissolution and liquidation of the
Partnership.
Distributions of Available Cash will be characterized as
either distributions of Cash from Operations or Cash from Interim
Capital Transactions. All Available Cash distributed by the
Partnership on any date from any source will be treated as if it
were a distribution of Cash from Operations until the sum of all
distributions of Available Cash treated as Cash from Operations
is equal to the sum of (i) the balance of the Reserve Account at
Partnership Inception and (ii) the aggregate amount of all Cash
from Operations generated by the Partnership since Partnership
Inception through the end of the prior calendar quarter, any
remaining Available Cash distributed on such date will be treated
as if it were a distribution of Cash from Interim Capital
Transactions, except as otherwise set forth herein.
(b) "Cash from Interim Capital Transactions" means at any date
such amounts of Available Cash as are deemed to be Cash from
Interim Capital Transactions pursuant to Section 5.3;
(c) "Cash from Operations" means, at any date but prior to
commencement of the dissolution and liquidation of the
Partnership, on a cumulative basis:
(i) the sum of:
(A) the cash balance of the Partnership and the
Operating Companies at the Partnership Inception after
all transactions contemplated on the Closing Date,
including the Reserve Amount, plus
(B) all cash receipts of the Partnership and the
Operating Companies from their operations (excluding
any cash proceeds from any Interim Capital Transactions
or from any sale, transfer or disposition of assets
after commencement of the dissolution and liquidation
of the Partnership) during the period from the
Partnership Inception through such date;
(ii) less the sum of:
(AA) all cash operating expenditures of the
Partnership and the Operating Companies during such
period, including, without limitation, taxes imposed on
the Partnership or the Operating Companies as an
entity,
(BB) all cash debt service payments of the
Partnership and the Operating Companies during such
period (other than payments or prepayments of principal
and premiums required by reason of loan agreements
(including covenants and default provisions therein) or
by lenders, in each case in connection with the sales
or other dispositions of assets or made in connection
with refinancings or refundings of indebtedness,
provided that any payment or prepayment of principal,
whether or not then due, may be determined at the
election and in the discretion of the General Partner,
to be refunded or refinanced by any indebtedness
incurred or to be incurred by the Partnership or the
Operating Companies simultaneously with or within 180
days prior to or after such payment or prepayment to
the extent of the principal amount of such indebtedness
so incurred),
(CC) all cash capital expenditures of the
Partnership and the Operating Companies during such
period (other than (x) any cash capital expenditure
made for the purpose of materially increasing the
capacity of the Operating Companies' pipelines and
facilities (considered as a whole and assuming normal
operating conditions, including downtime and
maintenance), and not in connection with scheduled
maintenance activities, over the capacity of such
pipelines and facilities existing immediately prior to
such capital expenditure and (y) any cash expenditures
made in payment of transaction expenses relating to
Interim Capital Transactions),
(DD) any reserves outstanding as of such date
which are required, or the General Partner determines
in its reasonable discretion to be necessary or
appropriate to provide for the future cash payment of
items of the type referred to in clauses (AA) through
(CC) of this sentence, and
(EE) any reserves (other than the Reserve Amount)
outstanding as of such date that the General Partner
determines to be necessary or appropriate in its
reasonable discretion to provide funds for
distributions on a consolidated basis and after
elimination of intercompany items and the Company's non-
managing interest in the Operating Companies.
Taxes paid by the Partnership on behalf of, or amounts
withheld with respect to, any of the Partners shall not be
considered cash operating expenditures of the Partnership which
reduce "Cash from Operations," but shall be deemed to be a
distribution of Available Cash to such Partners. Alternatively,
in the discretion of the General Partner, such taxes (if
pertaining to all Partners) may be considered to be cash
disbursements of the Partnership which reduce "Cash from
Operations," but shall not be deemed to be a distribution of
Available Cash to such Partners.
(d) "First Target Distribution" means $0.65 ($0.325 on and after
the 1996 Split Date) per Unit per calendar quarter (or, with
respect to the period commencing on the Closing Date and ending
on March 31, 1993, the product of $0.65 multiplied by a fraction
of which the numerator is the number of days in such period and
of which the denominator is 90), subject to adjustment in
accordance with Sections 5.9 and 9.6;
(e) "Interim Capital Transactions" means (i) borrowings,
refinancings or refundings of indebtedness and sales of debt
securities (other than for working capital purposes and for items
purchased on open account in the ordinary course of business) by
the Partnership or the Operating Companies, (ii) sales of equity
interests by the Partnership or the Operating Companies and (iii)
sales or other voluntary or involuntary dispositions of any
assets of the Partnership or the Operating Companies (other than
(x) sales or other dispositions of inventory in the ordinary
course of business, (y) sales or other dispositions of other
current assets including amounts receivable or (z) sales or other
dispositions of assets as a part of normal retirements or
replacements), in each case prior to the commencement of the
dissolution and liquidation of the Partnership;
(f) "Minimum Quarterly Distribution" means $0.55 ($0.275 on and
after the 1996 Split Date) per Unit (as adjusted for Partnership
Interest Adjusting Events) per calendar quarter (or, with respect
to the period commencing on the Closing Date and ending on March
31, 1993, the product of $0.55 (as adjusted for Partnership
Interest Adjusting Events) multiplied by a fraction of which the
numerator is the number of days in such period and of which the
denominator is 90), subject to adjustment in accordance with
Sections 5.9 and 9.6;
(g) "Net Income" means, for any taxable period, the excess, if
any, of the Partnership's items of income and gain (other than
those items attributable to dispositions constituting Termination
Capital Transactions) for such taxable period over the
Partnership's items of loss and deduction (other than these items
attributable to dispositions constituting Termination Capital
Transactions) for such taxable period. The items included in the
calculation of Net Income shall be determined in accordance with
Section 4.6(b) and shall not include any items specially
allocated under Section 5.1(d) or 5.1(e). Once an item of
income, gain, loss or deduction that has been included in the
initial computation of Net Income is subject to a Required
Allocation or a Discretionary Allocation, the applicable Net
Income or Net Loss shall be recomputed without regard to such
item. For purposes of Sections 5.1(a) and 5.1(b), in determining
whether Net Income has been allocated to any Unit or any Partner
(as the case may be) for any previous taxable period, any
Unrealized Gain or Unrealized Loss allocated pursuant to Section
4.6(d) shall be treated as item of gain or loss in computing Net
Income;
(h) "Net Loss" means, for any taxable period, the excess, if
any, of the Partnership's items of loss and deduction (other than
those items attributable to dispositions constituting Termination
Capital Transactions) for such taxable period over the
Partnership's items of income and gain (other than those items
attributable to dispositions constituting Termination Capital
Transactions) for such taxable period. The items included in the
calculation of Net Loss shall be determined in accordance with
Section 4.6(b) and shall not include any items specifically
allocated under Section 5.1(d) or 5.1(e). Once an item of
income, gain, loss or deduction that has been included in the
initial computation of Net Loss is subjected to a Required
Allocation or a Discretionary Allocation, the applicable Net
Income or Net Loss shall be recomputed without regard to such
item. For purposes of Sections 5.1(a) and 5.1(b), in determining
whether Net Losses have been allocated to any Unit or any Partner
(as the case may be) for any previous taxable period any
Unrealized Gain or Unrealized Loss allocated pursuant to Section
4.6(d) shall be treated as an item of gain or loss in computing
Net Losses;
(i) "Net Termination Gain" means, for each Partnership year or
shorter period the sum, if positive, of all items of gain or loss
recognized by the Partnership from Termination Capital
Transactions and all items of income, gain, loss and deduction
(as determined in accordance with Section 4.6(b)) recognized by
the Partnership after the time in which the Partnership has
dissolved and can no longer be continued pursuant to Section
14.2;
(j) "Net Termination Loss" means, for each Partnership year or
shorter period the sum, if negative, of all items of gain or loss
recognized by the Partnership from Termination Capital
Transactions and all items of income, gain, loss and deduction
(as determined in accordance with Section 4.6(b)) recognized by
the Partnership after the time in which the Partnership has
dissolved and can no longer be continued pursuant to Section
14.2;
(k) "Second Target Distribution" means $0.75 ($0.375 on and
after the 1996 Split Date) per Unit per calendar quarter (or,
with respect to the period commencing on the Closing Date and
ending on March 31, 1993, the product of $0.75 multiplied by a
fraction of which the numerator is equal to the number of days in
such period and of which the denominator is 90), subject to
adjustment in accordance with Sections 5.9 and 9.6;
(l) "Series A Preference Unit Cumulative Deficiency" means, with
respect to any Series A Preference Unit, the excess of (a) the
sum resulting from adding together the Series A Preference Unit
Deficiency as to such Series A Preference Unit for each of the
quarters ending prior to such quarter over (b) the sum of any
distributions theretofore made with respect to such Series A
Preference Unit pursuant to paragraph (b) of Section 5.4 and
paragraph (b) of Section 5.5;
(m) "Series A Preference Unit Deficiency" means, with respect to
any Series A Preference Unit, as to any calendar quarter, the
excess of (a) the Minimum Quarterly Distribution over (b) the sum
of all Available Cash distributed with respect to such Series A
Preference Unit pursuant to paragraph (a) of Section 5.4 or
paragraphs (a) and (b) of Section 5.5, as applicable;
(n) "Termination Capital Transaction" means any sale, transfer
or other disposition of property of the Partnership, the
Operating Companies or the Joint Ventures occurring after the
time in which the Partnership has dissolved and can no longer be
continued pursuant to Section 14.2; and
(o) "Third Target Distribution" means $0.85 ($0.425 on and after
the 1996 Split Date) per Unit per calendar quarter (or, with
respect to the period commencing on the Closing Date and ending
on March 31, 1993, the product of $0.85 multiplied by a fraction
of which the numerator is equal to the number of days in such
period and of which the denominator is 90), subject to adjustment
in accordance with Sections 5.9 and 9.6.
5.9 Adjustments to Minimum Quarterly Distribution Levels, Target
Levels, Unrecovered Capital, Series B Preference Unit Amounts and
Certain Other Provisions.
(a) Adjustments of the Minimum Quarterly Distribution, First
Target Distribution, Second Target Distribution, Third Target
Distribution, Unrecovered Capital, Series B Preference Unit Face
Value and Series B Preference Unit Liquidation Value shall be
made in the following circumstances: (i) the Minimum Quarterly
Distribution, First Target Distribution, Second Target
Distribution, Third Target Distribution, Unrecovered Capital,
Series B Preference Unit Face Value and Series B Preference Unit
Liquidation Value shall be proportionately adjusted in the event
of any distribution, combination or subdivision (whether effected
by a distribution payable in Units or otherwise) of Units or
other Partnership Securities in accordance with Section 4.11; and
(ii) in the event of a distribution of Available Cash that is
deemed to be Cash from Interim Capital Transactions, the Minimum
Quarterly Distribution, First Target Distribution, Second Target
Distribution and Third Target Distribution shall be
proportionately adjusted downward to equal the product obtained
by multiplying the otherwise applicable Minimum Quarterly
Distribution, First Target Distribution, Second Target
Distribution and Third Target Distribution, as the same may have
been previously adjusted by a fraction of which the numerator is
the Unrecovered Capital or Series B Preference Unit Face Value,
as applicable, immediately after giving effect to such
distribution and the denominator is the Unrecovered Capital or
Series B Preference Unit Face Value, as applicable, immediately
prior to giving effect to such distribution.
(b) The Minimum Quarterly Distribution, First Target
Distribution, Second Target Distribution, Third Target
Distribution and the amount distributed under may be adjusted
under the circumstances, and in the manner, set forth in Section
9.6.
5.10 Reserve Amount
The Partnership shall establish the Reserve Amount, consisting
of the aggregate cash on hand in the Partnership and the
Operating Companies at Partnership Inception, on a combined
basis, increased by net cash proceeds to the Partnership from the
exercise by the Underwriters of the over-allotment option
described in Section 4.3(c) hereof, which shall be deemed to
occur for purposes of determination of the Reserve Amount at
Partnership Inception. The Reserve Amount shall be an asset of
the Partnership, need not be maintained separate or apart from
any other reserves, accounts or assets of the Partnership and
shall be utilized, in the sole discretion of the General Partner,
for any proper Partnership purpose, including but not limited to
stabilizing distributions to Unitholders, debt reduction, capital
expenditures, additional funding of the Reserve Amount or the
establishment or increase of other appropriate reserves. The
General Partner, in its sole discretion, may elect to retain in
the Reserve Amount any balance therein and may voluntarily
increase or decrease the Reserve Amount, from time to time, and
need not justify such retention increase or decrease as being for
any particular Partnership purpose. The balance in the Reserve
Amount shall be disregarded in determining the need for or
amounts of other reserves which the General Partner is authorized
to establish and maintain pursuant to this Agreement.
5.11 Special Distributions.
(a) On the Optional Closing Date (as defined in the Underwriting
Agreement), the General Partner shall surrender to the
Partnership a number of Common Units equal to the number of
Series A Preference Units acquired by the Underwriters in excess
of 393,750 Series A Preference Units in exchange for a per Unit
distribution equal to the Issue Price per Unit.
b) Distributions under this Section 5.11 shall not be
considered to be distributions or expenditures for purposes of
this Article V, including calculations of Available Cash, Cash
from Operations or rights to other distributions.
ARTICLE VI
Management And Operation Of Business
6.1 Management.
(a) The General Partner shall conduct, direct and exercise full
control over all activities of the Partnership. Except as
otherwise expressly provided in this Agreement, all management
powers over the business and affairs of the Partnership shall be
exclusively vested in the General Partner, and no Limited Partner
or Assignee shall have any right of control or management power
over the business and affairs of the Partnership. In addition to
the powers now or hereafter granted a general partner of a
limited partnership under applicable law or which are granted to
the General Partner under any other provision of this Agreement,
the General Partner, subject to Section 6.3, shall have full
power and authority to do all things and on such terms as it, in
its sole discretion, may deem necessary or appropriate (i) to
conduct the business of the Partnership, to exercise all powers
set forth in Section 3.2 and to effectuate the purposes set forth
in Section 3.1, including, without limitation, (A) the making of
any expenditures, the lending or borrowing of money, the
assumption or guarantee of, or other contracting for,
indebtedness and other liabilities, the issuance of evidences of
indebtedness and the incurring of any other obligations and the
securing of same by mortgage, deed of trust or other lien or
encumbrance; (B) the making of tax, regulatory and other filings,
or rendering of periodic or other reports to governmental or
other agencies having jurisdiction over the business or assets of
the Partnership; (C) the acquisition, disposition, mortgage,
pledge, encumbrance, hypothecation or exchange of any or all of
the assets of the Partnership or the merger or other combination
of the Partnership with or into another Person (the matters
described in this clause (C) being subject however, to any prior
approval that may be required by Section 6.3); (D) the use of the
assets of the Partnership (including, without limitation, cash on
hand) for any purpose consistent with the terms of this Agreement
including, without limitation, the financing of the conduct of
the operations of the Partnership or the Operating Companies, the
lending of funds to other Persons (including, without limitation,
the Operating Companies) and the repayment of obligations of the
Partnership and the Operating Companies and the making of capital
contributions to the Operating Companies; (E) the negotiation,
execution and performance of any contracts, conveyances or other
instruments (including, without limitation, instruments that
limit the liability of the Partnership under contractual
arrangements to all or particular assets of the Partnership, with
the other party to the contract to have no recourse against the
General Partner or its assets other than its interest in the
Partnership, even if same results in the terms of the transaction
being less favorable to the Partnership than would otherwise be
the case); (F) the distribution of Partnership cash; (G) the
selection and dismissal of employees and agents (including,
without limitation, employees having titles such as "president,"
"vice president," "secretary" and "treasurer") and agents,
outside attorneys, accountants, consultants and contractors and
the determination of their compensation and other terms of
employment or hiring; (H) the maintenance of insurance for the
benefit of the Partners and the Partnership and the Operating
Companies (including, without limitation, the assets and
operations of the Partnership and the Operating Companies); (I)
the formation of, or acquisition of an interest in, and the
contribution of property to, any further limited or general
partnerships, joint ventures, corporations or other relationships
(including, without limitation, the acquisition of interest in,
and the contributions of property to, the Operating Companies
from time to time); (J) the control of any matters affecting the
rights and obligations of the Partnership, including, without
limitation, the bringing and defending of actions at law or in
equity and otherwise engaging in the conduct of litigation and
the incurring of legal expense and the settlement of claims and
litigation; (K) the indemnification of any Person against
liabilities and contingencies to the extent permitted by law; (L)
the entering into of listing agreements with the New York Stock
Exchange and any other securities exchange and the delisting of
some or all of the Units from, or requesting that trading be
suspended on, any such exchange (subject to any prior approval
that may be required under Section 1.6); and (M) the purchase,
sale or other acquisition or disposition of Units and, subject to
Section 4.4(c), other Partnership securities; and (ii) to
undertake any action in connection with the Partnership's
participation in the Operating Companies as the managing member
(including, without limitation, contributions or loans of funds
by the Partnership to the Operating Companies).
(b) Notwithstanding any other provision of this Agreement, the
Charter Documents of the Operating Companies and the Joint
Ventures, the Delaware Act or any applicable law, rule or
regulation, each of the Partners and Assignees and each other
Person who may acquire an interest in Units hereby (i) approves,
ratifies and confirms the execution, delivery and performance by
the parties thereto of each of the agreements described in or
filed as an exhibit to the Registration Statement, specifically
including, but not limited to, the Revolving Credit Facility and
the notes, security agreements and other documents evidencing or
securing the same or relating thereto, the Conveyance Agreement
and the deeds, assignments, bills of sale and other documents
relating thereto, the applicable Charter Documents, the
Underwriting Agreement and the Management Agreement (each such
capitalized term having the meaning assigned thereto in the
Registration Statement); (ii) agrees that the General Partner is
authorized to execute, deliver and perform the agreements
referred to in clause (i) of this sentence and the other
agreements, acts, transactions and matters described in the
Registration Statement on behalf of the Partnership without any
further act, approval or vote of the Partners or the Assignees or
the other Persons who may acquire an interest in Units; and (iii)
agrees that none of the execution, delivery or performance by the
General Partner, the Partnership, the Operating Companies or any
Affiliate thereof of any agreement authorized or permitted under
this Agreement (including, without limitation, the exercise by
the General Partner or any Affiliate of the General Partner of
the rights accorded pursuant to Article XVII) shall constitute a
breach by the General Partner of any duty that the General
Partner may owe the Partnership or the Limited Partners or the
Assignees or any other Persons under this Agreement or of any
duty stated or implied by law or equity.
6.2 Certificate of Limited Partnership
Prior to the Closing Date, the General Partner caused the
Certificate of Limited Partnership (in its form at such time) to
be filed with the Secretary of State of the State of Delaware as
required by the Delaware Act. The General Partner shall use all
reasonable efforts to cause to be filed such other certificates
or documents as may be determined by the General Partner in its
sole discretion to be reasonable and necessary or appropriate for
the formation, continuation, qualification and operation of a
limited partnership (or a partnership in which the limited
partners have limited liability) in the State of Delaware or any
other state in which the Partnership may elect to do business or
own property. To the extent that such action is determined by
the General Partner in its sole discretion to be reasonable and
necessary or appropriate, the General Partner shall file
amendments to and restatements of the Certificate of Limited
Partnership and do all things to maintain the Partnership as a
limited partnership (or a partnership in which the limited
partners have limited liability) under the laws of the State of
Delaware or of any other state in which the Partnership may elect
to do business or own property. Subject to the terms of Section
7.5(a), the General Partner shall not be required before or after
filing, to deliver or mail a copy of the Certificate of Limited
Partnership, any qualification document or any amendment thereto
to any Limited Partner or Assignee.
6.3 Restrictions on General Partner's Authority.
(a) The General Partner may not, without written approval of the
specific act by all of the Limited Partners or by other written
instrument executed and delivered by all of the Limited Partners
subsequent to the date of this Agreement, take any action in
contravention of this Agreement, including, without limitation,
(i) any act that would make it impossible to carry on the
ordinary business of the Partnership, except as otherwise
provided in this Agreement; (ii) possess Partnership property, or
assign any rights in specific Partnership property, for other
than a Partnership purpose; (iii) admit a Person as a Partner,
except as otherwise provided in this Agreement; (iv) amend this
Agreement in any manner, except as otherwise provided in this
Agreement or applicable law; or (v) transfer its interest as
general partner of the Partnership, except as otherwise provided
in this Agreement.
(b) Except as provided in Article XIV and XVI, the General
Partner may not sell, exchange or otherwise dispose of all or
substantially all of the Partnership's assets in a single
transaction or a series of related transactions (including by way
of merger, consolidation or other combination with any other
Person) or approve on behalf of the Partnership the sale,
exchange or other disposition of all or substantially all of the
assets of all of the Operating Companies, taken as a whole, or of
interests in the Operating Companies, without the approval of the
holders of record of at least 66 2/3% of the Outstanding Series A
Preference Units during the Series A Preference Unit Preference
Period and thereafter without the approval of the holders of at
least a majority of the Outstanding Voting Units; provided,
however, that this provision shall not preclude or limit the
General Partner's ability to mortgage, pledge, hypothecate or
grant a security interest in all or substantially all of the
Partnership's assets or the Operating Companies assets and shall
not apply to any forced sale of any or all of the Partnership's
assets or the Operating Companies' assets pursuant to the
foreclosure of, or other realization upon, any such encumbrance.
Without the approval of the holders of at least a majority of the
Outstanding Series A Preference Units during the Series A
Preference Unit Preference Period and thereafter without the
approval of the holders of at least a majority of the Outstanding
Voting Units, the General Partner shall not, on behalf of the
Partnership, consent to any amendment to the Operating Companies'
Agreements that would adversely affect the Partnership as a
member of the Operating Companies. In no event shall all or
substantially all of the Partnership's assets be sold, exchanged
or otherwise disposed of in a single transaction or a series of
related transactions (including by way of merger, consolidation
or other combination with any other Person) without the approval
of the General Partner.
(c) Unless approved by the affirmative vote of the holders of at
least 662/3% of the Outstanding Voting Units, including the vote
of a majority of the Outstanding Series A Preference Units,
(other than Preference Units held by the General Partner and its
affiliates), the General Partner shall not take any action or
refuse to take any reasonable action the effect of which, if
taken or not taken, as the case may be, would be to cause the
Partnership or, to the extent it would materially and adversely
affect the Limited Partners holding Units, the Operating
Companies to be taxable as a corporation or otherwise taxed as an
entity for federal income tax purpose; provided that this Section
6.3(c) shall not be construed to apply to amendments to this
Agreement (which are governed by Article XV) or mergers or
consolidations of the Partnership with any Person (which are
governed by Article XVI).
(d) At all times while serving as the general partner of the
Partnership, the General Partner shall not make any dividend or
distribution on, repurchase any shares of its stock, or take any
other action within its control if the effect of such dividend
distribution, repurchase or other action (i) would cause it hold
less than 19% of the Outstanding Units and (ii) would be to
reduce its net worth below an amount necessary to receive an
Opinion of Counsel that the Partnership will be treated as a
partnership for federal income tax purposes.
6.4 Reimbursement of the General Partner.
(a) Except as provided in this Section 6.4 and elsewhere in this
Agreement, the General Partner shall not be compensated for its
services as general partner of the Partnership.
(b) The General Partner shall be reimbursed on a monthly basis,
or such other basis as the General Partner may determine in its
sole discretion, for (i) all direct and indirect expenses it
incurs or payments it makes on behalf of the Partnership
(including, without limitation, amounts paid to any Person to
perform services for the Partnership), and (ii) that portion of
the General Partner's or its Affiliates' legal, accounting,
investor communications, utilities, telephone, secretarial,
travel, entertainment, bookkeeping, reporting, data processing,
office rent and other office expenses (including, without
limitation, overhead charges), salaries, fees and other
compensation and benefit expenses of employees, officers and
directors, insurance, other administrative or overhead expenses
and all other expenses, in each such case, necessary or
appropriate to the conduct of the Partnership's business and
reasonably allocable to the Partnership or otherwise incurred by
the General Partner in connection with operating the
Partnership's business (including, without limitation, expenses
allocated to the General Partner by its Affiliates and payments
made by the General Partner to DeepTech pursuant to the
Management Agreement dated as of July 1, 1992). Any accruals by
the General Partner of the expected cost of providing all forms
of post-retirement benefits to employees or former employees of
the General Partner and their beneficiaries and qualified
dependents will be borne by the Partnership, to the extent
properly allocable thereto. The General Partner shall determine
the fees and expenses that are allocable to the Partnership in
any reasonable manner determined by the General Partner in its
sole discretion. Such reimbursements shall be in addition to any
reimbursement to the General Partner as a result of
indemnification pursuant to Section 6.7.
(c) Subject to Section 4.4(c), the General Partner in its sole
discretion and without the approval of the Limited Partners may
propose and adopt, on behalf of the Partnership, employee benefit
plans (including, without limitation, plans involving the
issuance of Units), for the benefit of employees of the General
Partner, the Partnership, the Operating Companies or any
Affiliate of any of them in respect of services performed
directly or indirectly, for the benefit of the Partnership or the
Operating Companies.
6.5 Outside Activities.
(a) The General Partner agrees that so long as it is the General
Partner of the Partnership, it will not engage in or acquire,
directly or indirectly, any business that is in direct material
competition with the business of the Partnership, subject to the
following exceptions:
First, the Company may acquire any competitive
business as part of a larger acquisition, so long as
75% or more of the revenues of the business acquired,
in the Company's reasonable judgment, are not derived
from such competitive business, provided however, if it
is commercially and operationally practicable, the
Company will use its reasonable efforts to offer that
portion of the competitive business to the Partnership;
and
Second, the Company may engage in or acquire any
competitive business if the same is first offered to
the Partnership and the Partnership declines by a
majority vote of the outstanding Units (excluding for
this purpose any Units held by the General Partner or
any of its affiliates) to make such acquisition or
engage in such business.
(b) Except as otherwise expressly provided in Section 6.5(a),
each Indemnitee is free to engage in any business, including any
business that is in competition with the business of the
Partnership. The General Partner and any other Persons
affiliated with the General Partner may acquire Units or other
Partnership Securities, in addition to those acquired by any of
such Persons on the Closing Date, and (except as the right to
vote such Units or other Partnership Securities may be expressly
limited in this Agreement) shall be entitled to exercise all
rights of an Assignee or Limited Partner, as applicable, relating
to such Units or Partnership Securities, as the case may be.
(c) Without limiting Sections 6.5(a) and 6.5(b), but
notwithstanding any other provision to the contrary in this
Agreement, the competitive activities of Indemnitees described in
the Registration Statement are hereby approved by all Partners
and it shall not be deemed to be a breach of the General
Partner's fiduciary duty for the General Partner to permit an
Indemnitee to engage in a business opportunity in preference to
or to the exclusion of the Partnership.
6.6 Loans to and from the General Partner; Contracts with
Affiliates.
(a) The General Partner or any Affiliate thereof may lend to the
Partnership or the Operating Companies, and the Partnership and
the Operating Partnership may borrow, funds needed or desired by
the Partnership and the Operating Companies for such periods of
time as the General Partner may determine and (b) the General
Partner or any Affiliate thereof may borrow from the Partnership
or the Operating Companies, and the Partnership and the Operating
Companies may lend to the General Partner or any Affiliate
thereof, excess funds of the Partnership and the Operating
Companies for such periods of time and in such amounts as the
General Partner may determine; provided, however, that in either
case the lending party may not charge the borrowing party
interest at a rate greater than the rate that would be charged
the borrowing party (without reference to the General Partner's
financial abilities or guarantees), by unrelated lenders on
comparable loans. The borrowing party shall reimburse the
lending party for any costs (other than any additional interest
costs) incurred by it in connection with the borrowing of such
funds. For purpose of this Section 6.6(a) and Section 6.6(b),
the term "Partnership" shall include any Affiliate of the
Partnership that is controlled by the Partnership and the term
"Operating Companies" shall include any Affiliate of the
Operating Companies that is controlled by the Operating
Companies.
(b) The Partnership may lend or contribute to the Operating
Companies, and the Operating Companies may borrow, funds on terms
and conditions established in the sole discretion of the General
Partner; provided, however, that the Partnership may not charge
the Operating Companies interest at a rate greater than the rate
that would be charged to the Operating Companies, (without
reference to the General Partner's financial abilities or
guarantees), by unrelated lenders on comparable loans. The
foregoing authority shall be exercised by the General Partner in
its sole discretion and shall not create any right or benefit in
favor of the Operating Companies or any other Person.
(c) The General Partner may itself, or may enter into an
agreement with any of its Affiliates to, render services to the
Partnership. Any service rendered to the Partnership by the
General Partner or any of its Affiliates shall be on terms that
are fair and reasonable to the Partnership; provided, however,
that the requirements of this Section 6.6(c) shall be deemed
satisfied as to any transaction the terms of which are no less
favorable to the Partnership than those generally being provided
to or available from unrelated third parties. The provisions of
Section 6.4 shall apply to the rendering of services described in
this Section 6.6(c).
(d) The Partnership may transfer assets to joint venture, other
partnerships, corporations or other business entities in which it
is or thereby becomes a participant upon such terms and subject
to such conditions as are consistent with this Agreement and
applicable law.
(e) Neither the General Partner nor any of its Affiliates shall
sell, transfer or convey any property to, or purchase any
property from, the Partnership, directly or indirectly, except
pursuant to transactions that are fair and reasonable to the
Partnership; provided, however, that the requirements of this
Section 6.6(e) shall be deemed to be satisfied as to (i) the
transactions effected pursuant to Sections 4.2 and 4.3, the
Conveyance Agreement and any other transactions described in or
contemplated by the Registration Statement and (ii) as to any
transaction the terms of which are no less favorable to the
Partnership than those generally being provided to or available
from unrelated third parties.
(f) The General Partner and its Affiliates shall have no
obligation to permit the Partnership or the Operating Companies
to use any facilities of the General Partner and its Affiliates,
except as may be provided in contracts entered into from time to
time specifically dealing with such use, nor shall there be any
obligation of the General Partner or its Affiliates to enter into
such contracts.
(g) Without limitation of Section 6.6(a) through 6.6(f), and
notwithstanding anything to the contrary in this Agreement, the
existence of the conflicts of interest described in the
Registration Statement are hereby approved by all Partners.
6.7 Indemnification.
(a) To the fullest extent permitted by law but subject to the
limitations expressly provided in this Agreement, the General
Partner, any Departing Partner and any person who is or was an
officer or director of the General Partner or any Departing
Partner shall be indemnified and held harmless by the
Partnership, and all other Indemnitees may be indemnified and
held harmless by the Partnership, to the extent deemed advisable
by the General Partner, from and against any and all losses,
claims, damages, liabilities (joint or several), expenses
(including, without limitation, legal fees and expenses),
judgments, fines settlements and other amounts arising from any
and all claims, demands, actions, suits or proceedings, whether
civil, criminal, administrative or investigative, in which any
Indemnitee may be involved, or is threatened to be involved, as a
party or otherwise, by reason of its status as (i) the General
Partner, Departing Partner or any of their Affiliates, (ii) an
officer, director, employee, partner, agent or trustee of the
General Partner, any Departing Partner or any of their Affiliates
or (iii) a Person serving at the request of the Partnership in
another entity in a similar capacity; provided, that in each case
the Indemnitee acted in good faith, in a manner which such
Indemnitee believed to be in, or not opposed to, the best
interests of the Partnership and, with respect to any criminal
proceeding, had no reasonable cause to believe its conduct was
unlawful; provided further, no indemnification pursuant to this
Section 6.7 shall be available to the General Partner with
respect to its obligations incurred pursuant to the Underwriting
Agreement or the Conveyance Agreement (other than obligations
incurred by the General Partner on behalf of the Partnership or
the Operating Companies). The termination of any action, suit or
proceeding by judgment, order settlement conviction or upon a
plea of nolo contendere, or its equivalent, shall not create a
presumption that the Indemnitee acted in a manner contrary to
that specified above. Any indemnification pursuant to this
Section 6.7 shall be made only out of the assets of the
Partnership, it being agreed that the General Partner shall not
be personally liable for such indemnification and shall have no
obligation to contribute or loan any monies or property to the
Partnership to enable it to effectuate such indemnification.
(b) To the fullest extent permitted by law, expenses (including,
without limitation, reasonable legal fees and expenses) incurred
by an Indemnitee who is indemnified pursuant to Section 6.7(a) in
defending any claim, demand action, suit or proceeding shall from
time to time, be advanced by the Partnership prior to the final
disposition of such claim, demand, action, suit or proceeding
upon receipt by the Partnership of an undertaking by or on behalf
of the Indemnitee to repay such amount if it shall be determined
that the Indemnitee is not entitled to be indemnified as
authorized in this Section 6.7.
(c) The indemnification provided by this Section 6.7 shall be in
addition to any other rights to which an Indemnitee may be
entitled under any agreement, pursuant to any vote of the
Partners, as a matter of law or otherwise, both as to actions in
the Indemnities' capacity as (i) the General Partner, a Departing
Partner or an Affiliate thereof, (ii) an officer, director,
employee, partner, agent or trustee of the General Partner, any
Departing Partner or an Affiliate thereof or (iii) a Person
serving at the request of the Partnership in another entity in a
similar capacity (including, without limitation, any capacity
under the Underwriting Agreement), and shall continue as to an
Indemnitee who has ceased to serve in such capacity and as to
actions in any other capacity and shall inure to the benefit of
the heirs, successors, assigns and administrators of the
Indemnities.
(d) The Partnership may purchase and maintain (or reimburse the
General Partner or its Affiliates for the cost of) insurance, on
behalf of the General Partner and such other Persons as the
General Partner shall determine, against any liability that may
be asserted against or expense that may be incurred by such
Person in connection with the Partnership's activities, whether
or not the Partnership would have the power to indemnify such
Person against such liabilities under the provisions of this
Agreement.
(e) For purposes of this Section 6.7, the Partnership shall be
deemed to have requested an Indemnitee to serve as fiduciary of
an employee benefit plan whenever the performance by it of its
duties to the Partnership also imposes duties on, or otherwise
involves services by, it to the plan or participants or
beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to
applicable law she constitute "fines" within the meaning of
Section 6.7(a); and action taken or omitted by it with respect to
an employee benefit plan in the performance of its duties for a
purpose reasonably believed by it to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be
for a purpose which is in, or not opposed to, the best interests
of the Partnership.
(f) In no event may an Indemnitee subject the Limited Partners
to personal liability by reason of the indemnification provisions
set forth in this Agreement.
(g) An Indemnitee shall not be denied indemnification in whole
or in part under this Section 6.7 because the Indemnitee had an
interest in the transaction with respect to which the
indemnification applies if the transaction was otherwise
permitted by the terms of this Agreement.
(h) The provisions of this Section 6.7 are for the benefit of
the Indemnities, their heirs, successors, assigns and
administrators and shall not be deemed to create any rights for
the benefit of any other Persons.
(i) No amendment, modification or repeal of this Section 6.7 or
any other provision hereof shall in any manner terminate, reduce
or impair the right of any past, present or future Indemnitee to
be indemnified by the Partnership, nor the obligation of the
Partnership to indemnify any such Indemnitee under and in
accordance with the provisions of this Section 6.7 as in effect
immediately prior to such amendment, modification or repeal with
respect to claims arising from or relating to matters occurring,
in whole or in part, prior to such amendment, modification or
repeal, regardless of when such claims may arise or be asserted.
6.8 Liability of Indemnitees.
(a) Notwithstanding anything to the contrary set forth in this
Agreement, no Indemnitee shall be liable for monetary damage to
the Partnership, the Limited Partners, the Assignees or any other
Persons who have acquired interests in the Units, for losses
sustained or liabilities incurred as a result of any act or
omission if such Indemnitee acted in good faith.
(b) Subject to its obligations and duties as General Partner set
forth in Section 6.1(a), the General Partner may exercise any of
the powers granted to it by this Agreement and perform any of the
duties imposed upon it hereunder either directly or by or through
its agents, and the General Partner shall not be responsible for
any misconduct or negligence on the part of any such agent
appointed by the General Partner in good faith.
(c) Any amendment, modification or repeal of this Section 6.8 or
any other provision hereof shall be prospective only and shall
not in any way affect the limitations on the liability to the
Partnership and the Limited Partners of the General Partner, its
directors, officers and employees under this Section 6.8 as in
effect immediately prior to such amendment, modification or
repeal with respect to claims arising from or relating to matters
occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise
or be asserted.
6.9 Resolution of Conflict of Interest.
(a) Unless otherwise expressly provided in this Agreement or an
Operating Companies Agreement, whenever a potential conflict of
interest exists or arise between the General Partner or any of
its Affiliates, on the one hand, and the Partnership, the
Operating Companies, any Partner or any Assignee, on the other
hand, any resolution or course of action in respect of such
conflict of interest shall be permitted and deemed approved by
all Partners, and shall not constitute a breach of this
Agreement, of the Charter Documents of any Operating Company, of
any agreement contemplated herein or therein, or of any duty
stated or implied by law or equity, if the resolution or course
of action is or, by operation of this Agreement, is deemed to be,
fair and reasonable to the Partnership. The General Partner
shall be authorized, but not required in connection with its
resolution of such conflict of interest to seek Special Approval
of a resolution of such conflict or course of action. Any
conflict of interest and any resolution of such conflict of
interest shall be conclusively deemed fair and reasonable to the
Partnership if such conflict of interest or resolution is (i)
approved by Special Approval, (ii) on whole, on terms no less
favorable to the Partnership than those generally being provided
to or available from unrelated third parties or (iii) fair to the
Partnership, taking into account the totality of the
relationships between the parties involved (including other
transactions that may be particularly favorable or advantageous
to the Partnership). The General Partner may also adopt a
resolution or course of action that has not received Special
Approval. The General Partner (including the Conflicts and Audit
Committee in connection with Special Approval) shall be
authorized in connection with its determination of the "fair and
reasonable" nature of any transaction or arrangement and in its
resolution of any conflict of interest to consider (i) the
relative interests of any party to such conflict, agreement,
transaction or situation and the benefits and burdens relating to
such interest; (ii) any customary or accepted industry practices
and any customary or historical dealings with a particular
Person; (iii) any applicable generally accepted accounting or
engineering practices or principles; and (iv) such additional
factors as the General Partner or such Conflicts and Audit
Committee determines in its sole discretion to be relevant,
reasonable or appropriate under the circumstances. Nothing
contained in this Agreement, however, is intended to nor shall it
be construed to require the General Partner or such Conflicts and
Audit Committee to consider the interests of any Person other
than the Partnership. In the absence of bad faith by the General
Partner, the resolution, action or terms so made, taken or
provided by the General Partner with respect to such matter shall
not constitute a breach of this Agreement or any other agreement
contemplated herein or a breach of any standard of care or duty
imposed herein or therein or under the Delaware Act or any other
law, rule or regulation.
(b) Whenever this Agreement or any other agreement contemplated
hereby provides that the General Partner or any of its Affiliates
is permitted or required to make a decision (i) in its "sole
discretion" or "discretion" that it deems "necessary or
appropriate" or under a grant of similar authority or latitude,
the General Partner or such Affiliate shall be entitled to
consider only such interests and factors as it desires and shall
have no duty or obligation to give any consideration to any
interest of, or factors affecting, the Partnership, the Operating
Companies, any Limited Partner or any Assignee, (ii) it may make
such decision in its sole discretion (regardless of whether there
is a reference to "sole discretion" or "discretion") unless
another express standard is provided for, or (iii) a "good faith"
or under another express standard, the General Partner or such
Affiliate shall act under such express standard and shall not be
subject to any other or different standards imposed by this
Agreement, the Charter Documents of any Operating Company, any
other agreement contemplated hereby or under the Delaware Act or
any other law, rule or regulation. In addition, any actions
taken by the General Partner consistent with the standards of
"reasonable discretion" set forth in the definitions of Available
Cash or Cash from Operations shall not constitute a breach of any
duty of the General Partner to the Partnership or the Limited
Partners. During or after the Series A Preference Unit
Preference Period, the General Partner shall have no duty,
express or implied, to sell or otherwise dispose of any asset of
the Operating Companies or of the Partnership, other than in the
ordinary course of business. No borrowing by the Partnership or
the Operating Companies or the approval thereof by the General
Partner shall be deemed to constitute a breach of any duty of the
General Partner to the Partnership or the Limited Partners by
reason of the fact that the purpose or effect of such borrowing
is directly or indirectly to reduce or avoid the need to draw
upon the Reserve Amount to make Minimum Quarterly Distributions
on the Series A Preference Units, to make distributions up to the
Series B Preference Unit Deficiency on the Series B Preference
Units, to permit distributions on Series A Common Units or to
result in or increase incentive distributions to the General
Partner.
(c) Whenever a particular transaction, arrangement or resolution
of a conflict of interest is required under this Agreement to be
"fair and reasonable" to any Person, the fair and reasonable
nature of such transaction, arrangement or resolution shall be
considered in the context of all similar or related transaction.
6.10 Other Matters Concerning the General Partner.
(a) The General Partner may rely and shall be protected in
acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice,
request consent, order, bond, debenture, or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties.
(b) The General Partner may consult with legal counsel,
accountants, appraisers, management consultants, investment
bankers and other consultants and advisers selected by it and any
act taken or omitted in reliance upon the opinion (including,
without limitation, an Opinion of Counsel) of such Persons as to
matters that the General Partner reasonably believes to be within
such Person's professional or expert competence shall be
conclusively presumed to have been done or omitted in good faith
and in accordance with such opinion.
(c) The General Partner shall have the right, in respect of any
of its powers or obligations hereunder, to act through any of its
duly authorized officers and a duly appointed attorney or
attorneys-in-fact. Each such attorney shall, to the extent
provided by the General Partner in the power of attorney, have
full power and authority to do and perform each and every act and
duty that is permitted or required to be done by the General
Partner hereunder.
(d) Any standard of care and duty imposed by this Agreement or
under the Delaware Act or any applicable law, rule or
regulation shall be modified waived or limited as required to
permit the General Partner to act under this Agreement or any
other agreement contemplated by this Agreement and to make any
decision pursuant to the authority prescribed in this Agreement,
so long as such action is reasonably believed by the General
Partner to be in, or not inconsistent with, the best interests of
the Partnership.
6.11 Title to Partnership Assets
. Title to Partnership Assets, whether real, personal or mixed
and whether tangible or intangible, shall be deemed to be owned
by the Partnership as an entity, and no Partner or Assignee,
individually or collectively, shall have any ownership interest
in such Partnership Assets or any portion thereof. Title to any
or all of the Partnership Assets may be held in the name of the
Partnership, the General Partner or one or more nominees, as the
General Partner may determine. The General Partner hereby
declares and warrants that any Partnership assets for which
record title is held in the name of the General Partner shall be
held by the General Partner for the exclusive use and benefit of
the Partnership in accordance with the provisions of this
Agreement; provided, however, that the General Partner shall use
its reasonable efforts to cause record title to such assets
(other than those assets in respect of which the General Partner
determines that the expense and difficulty of conveyancing makes
transfer of record title to the Partnership impracticable) to be
vested in the Partnership as soon as reasonably practicable;
provided, that prior to the withdrawal or removal of the General
Partner or as soon thereafter as practicable, the General Partner
will use reasonable efforts to effect the transfer of record
title to the Partnership and, prior to any such transfer, will
provide for the use of such assets in a manner satisfactory to
the Partnership. All Partnership Assets shall be recorded as the
property of the Partnership in its books and records,
irrespective of the name in which record title to such
Partnership assets are held.
6.12 Purchase or Sale of Preference Units
The General Partner may cause the Partnership to purchase or
otherwise acquire Series A Preference Units, so long as no Series
A Preference Unit Cumulative Deficiency then exists, and Series B
Preference Units, at any time. As long as Preference Units are
held by the Partnership or the Operating Companies, such
Preference Units shall not be considered Outstanding for any
purpose, except as otherwise provided herein. The General
Partner or any Affiliate of the General Partner may also purchase
or otherwise acquire and sell or otherwise dispose of Preference
Units for its own account, subject to the provisions of Articles
XI and XII.
6.13 Reliance by Third Parties
. Notwithstanding anything to the contrary in this Agreement,
any Person dealing with the Partnership shall be entitled to
assume that the General Partner has full power and authority to
encumber, sell or otherwise use in any manner any and all assets
of the Partnership and to enter into any contracts on behalf of
the Partnership, and such Person shall be entitled to deal with
the General Partner as if it were the Partnership's sole party in
interest, both legally and beneficially. Each Limited Partner
hereby waives any and all defenses or other remedies that may be
available against such Person to contest, negate or disaffirm any
action of the General Partner in connection with any such
dealing. In no event shall any Person dealing with the General
Partner or its representatives be obligated to ascertain that the
terms of this Agreement have been complied with or to inquire
into the necessity or expedience of any act or action of the
General Partner or its representatives. Each and every
certificate, document or other instrument executed on behalf of
the Partnership by the General Partner or its representatives
shall be conclusive evidence in favor of any and every Person
relying thereon or claiming thereunder that (a) at the time of
the execution and delivery of such certificate, document or
instrument, this Agreement was in full force and effect, (b) the
Person executing and delivering such certificate, document or
instrument was duly authorized and empowered to do so for and on
behalf of the Partnership and (c) such certificate, document or
instrument was duly executed and delivered in accordance with the
terms and provisions of this Agreement, and is binding upon the
Partnership
6.14 Registration Rights of the General Partner and its
Affiliates.
(a) If (i) the General Partner or any of its Affiliates
(including for purposes of this Section 6.14, Persons that are
Affiliates on the Second Restatement Date notwithstanding that
they may later cease to be Affiliates) hold Units or other
Partnership Securities which it desires to sell and (ii) Rule 144
of the Securities Act (or any successor rule or regulation to
Rule 144) is not available to enable the General Partner or such
Affiliates to dispose of the number of Units or other Partnership
Securities it desires to sell at the time it desires to do so
without registration under the Securities Act, then upon the
request of the General Partner or any of its Affiliates, the
Partnership shall file with the Securities and Exchange
Commission as promptly as practicable after receiving such
request, and use all reasonable efforts to cause to become
effective and remain effective for a reasonable period following
its effective date, a registration statement or statements under
the Securities Act registering the offering and sale of the
number of Units or other Partnership Securities specified in the
request. All registrations requested pursuant to this Section
6.14(a) are referred to as "Demand Registrations." The
Partnership may postpone for up to six months the filing or the
effectiveness of a registration statement pursuant to a Demand
Registration if (i) the General Partner or, (ii) if at the time a
request for Demand Registration is submitted to the Partnership
the Person requesting registration is an Affiliate of the General
Partner, a majority of the independent directors of the General
Partner, determines in its good faith judgment that a
postponement of the requested registration for up to six months
would be in the best interests of the Partnership and its
Partners due to a pending transaction, investigation or other
event. In connection with any Demand Registration, the
Partnership shall promptly prepare and file (x) such documents as
may be necessary to register or qualify the securities subject to
such registration under the securities laws of such states as the
Persons requesting registration shall reasonably request;
provided, however, that no such qualification shall be required
in any jurisdiction where, as a result thereof, the Partnership
would become subject to general service of process or to taxation
or qualification to do business as a foreign corporation doing
business in such jurisdiction, and (y) such documents as may be
necessary to apply for listing or to list the securities subject
to such registration on such National Securities Exchange as the
Persons requesting registration shall reasonably request and do
any and all other acts and things that may reasonably be
necessary or advisable to enable such Persons to consummate a
public sale of such securities in such states. All costs and
expenses of any such Demand Registration and offering (other than
the underwriting discounts and commissions) shall be borne by the
Partnership.
(b) If the Partnership shall at any time propose to file a
registration statement under the Securities Act for an offering
of securities of the Partnership for cash (other than an offering
relating solely to an employee benefit plan), the Partnership
shall use all reasonable efforts to include such number or amount
of securities held by the General Partner and any of its
Affiliates in such registration statement as the General Partner
or any of such Affiliates shall request. All registrations
requested pursuant to this Section 6.14(b) are referred to herein
as "Piggyback Registrations." If the proposed offering shall be
an underwritten offering, then, in the event that the managing
underwriter of such offering advises the Partnership and General
Partner or any of such Affiliates in writing that in its opinion
the inclusion of all or some of the securities of the Persons
requesting Piggyback Registration would adversely and materially
affect the success of the offering the Partnership shall include
in such offering only that number or amount, if any, of
securities of the Persons requesting Piggyback Registration
which, in the opinion of the managing underwriter, will not so
adversely and materially affect the offering. All costs and
expenses of such registration and offering (other than
underwriting discounts and commissions attributable to securities
registered by the General Partner and its Affiliates) shall be
borne by the Partnership.
(c) If underwriters are engaged in connection with any Demand or
Piggyback Registration, the Partnership shall provide
indemnification, representations, covenants, opinions and other
assurance to the underwriters in form and substance reasonably
satisfactory to such underwriters. Further, in addition to and
not in limitation of the Partnership's obligation under Section
6.7, the Partnership shall, to the fullest extent permitted by
law, indemnify and hold harmless the General Partner or such
other holder, its officers, directors and each Person who
controls the General Partner or such other holder (within the
meaning of the Securities Act) and any agent thereof
(collectively, "Indemnified Persons") against any losses, claims,
demands, actions, causes of action, assessments, damages,
liabilities (joint or several), costs and expenses (including,
without limitation, interest penalties and reasonable attorneys'
fees and disbursements), resulting to, imposed upon, or incurred
by an Indemnified Person, directly or indirectly, under the
Securities Act or otherwise (hereinafter referred to in this
Section 6.14(c) as a "claim" and in the plural as "claims"),
based upon, arising out of, or resulting from any untrue
statement or alleged untrue statement of any material fact
contained in any registration statement under which any
securities were registered under the Securities Act or any state
securities or Blue Sky laws, in any preliminary prospectus (if
used prior to the effective date of such registration statement),
or in any summary or final prospectus or in any amendment or
supplement thereto (if used during the period the Partnership is
required to keep the registration statement current), or arising
out of, based upon or resulting from the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements made therein not
misleading; provided, however, that the Partnership shall not be
liable to the extent that any such claim arises out of, is based
upon or results from an untrue statement or alleged untrue
statement or omission or alleged omission made in such
registration statement, such preliminary, summary or final
prospectus or such amendment or supplement in reliance upon and
in conformity with written information furnished to the
Partnership by or on behalf of such Indemnified Person
specifically for use in the preparation thereof.
(d) The provisions of Sections 6.14(a) and 6.14(b) shall
continue to be applicable with respect to the General Partner and
any of its Affiliates after the General Partner ceases to be a
Partner of the Partnership, during a period of two years
subsequent to the effective date of such cessation and for so
long thereafter as is required for the General Partner or any of
its Affiliates to sell all of the Units or other Partnership
Securities with respect to which the General Partner or any of
its Affiliates have requested during such two-year period that a
registration statement be filed; provided, however, that the
Partnership shall not be required to file successive registration
statements covering the same securities for which registration
was demanded during such two-year period. The provisions of
Section 6.14(c) shall continue in effect thereafter.
(e) Any request to register Partnership Securities pursuant to
this Section 6.14 shall (i) specify the Partnership Securities
intended to be offered and sold by the Person making the request,
(ii) express such Person's present intent to offer such shares
for distribution, (iii) describe the nature or method of the
proposed offer and sale of Partnership Securities, and (iv)
contain the undertaking of such Person to provide all such
information and materials and take all action as may be required
in order to permit the Partnership to comply with all applicable
requirements in connection with the registration of such
Partnership Securities.
ARTICLE VII
Rights And Obligations Of Limited Partners
7.1 Limitation of Liability
The Limited Partners and the Organizational Limited Partner
and the Assignees shall have no liability under this Agreement
except as expressly provided in this Agreement or the Delaware
Act.
7.2 Management of Business
No Limited Partner or Assignee (other than the General
Partner, any of its Affiliates or any officer, director, employee
partner, agent or trustee of the General Partner or any of its
Affiliates, in its capacity as such, if such Person shall also be
a Limited Partner or Assignee) shall take part or otherwise
participate in the operation, management or control (within the
meaning of the Delaware Act) of the Partnership's business,
transact any business in the Partnership's name or have the power
to sign documents for or otherwise bind the Partnership. The
transaction of any such business by the General Partner, any of
its Affiliates or any officer, director, employee, partner, agent
or trustee of the General Partner or any of its Affiliates, in
its capacity as such, shall not affect, impair or eliminate the
limitations on the liability of the Limited Partners or Assignees
under this Agreement.
7.3 Outside Activities
Subject to the provisions of Section 6.5, which shall continue
to be applicable to the Persons referred to therein, regardless
of whether such Persons shall also be Limited Partners or
Assignees, any Limited Partner or Assignee shall be entitled to
and may have business interests and engage in business activities
in addition to those relating to the Partnership, including,
without limitation, business interests and activities in direct
competition with the Partnership or the Operating Companies.
Neither the Partnership nor any of the other Partners or
Assignees shall have any rights by virtue of this Agreement in
any business ventures of any Limited Partner or Assignee.
7.4 Return of Capital
No Limited Partner shall be entitled to the withdrawal or
return of his Capital Contribution, except to the extent, if any,
that distributions made pursuant to this Agreement or upon
termination of the Partnership may be considered as such by law
and then only to the extent provided for in this Agreement.
Except to the extent provided by Article V or as otherwise
expressly provided in this Agreement, no Limited Partner or
Assignee shall have priority over any other Limited Partner or
Assignee either as to the return of Capital Contributions or as
to profits, losses or distributions. Any such return shall be a
compromise to which all Partners and Assignees agree within the
meaning of Section 17-502(b) of the Delaware Act.
7.5 Rights of Limited Partner Relating to the Partnership.
(a) In addition to other rights provided by this Agreement or by
applicable law, and except as limited by Section 7.5(b), each
Limited Partner shall have the right, for a purpose reasonably
related to such Limited Partner's interest as a limited partner
in the Partnership, upon reasonable demand and at such Limited
Partner's own expense:
(i) to obtain true and full information regarding the status of
the business and financial condition of the Partnership;
(ii) promptly after becoming available, to obtain a copy of the
Partnership's federal, state and local tax returns for each year;
(iii) to have furnished to him, upon notification to the
General Partner, a current list of the name and last known
business, residence or mailing address of each Partner;
(iv) to have furnished to him, upon notification to the General
Partner, a copy of this Agreement and the Certificate of Limited
Partnership and all amendments thereto;
(v) to obtain true and full information regarding the amount of
cash and description and statement of the Agreed Value of any
other Capital Contribution by each Partner and which each Partner
has agreed to contribute in the future, and the date on which
each became a Partner; and
(vi) to obtain such other information regarding the affairs of
the Partnership as is just and reasonable.
(b) Notwithstanding any other provision of this Agreement, the
General Partner may keep confidential from the Limited Partners
and Assignees for such period of time as the General Partner
deems reasonable, any information that the General Partner
reasonably believes to be in the nature of trade secrets or other
information the disclosure of which the General Partner in good
faith believes is not in the best interests of the Partnership or
could damage the Partnership or the Operating Companies or that
the Partnership or the Operating Companies is required by law or
by agreements with third parties to keep confidential (other than
agreements with Affiliates the primary purpose of which is to
circumvent the obligations set forth in this Section 7.5).
ARTICLE VIII
Book, Records, Accounting and Reports
8.1 Records and Accounting
The General Partner shall keep or cause to be kept at the
principal office of the Partnership appropriate books and records
with respect to the Partnership's business, including, without
limitation, all books and records necessary to provide to the
Limited Partners any information, lists and copies of documents
required to be provided pursuant to Section 7.5(a). Any books
and records maintained by or on behalf of the Partnership in the
regular course of its business, including, without limitation,
the record of the Record Holders and Assignees of Units or other
Partnership Securities, books of account and records of
Partnership proceedings, may be kept on, or be in the form of,
computer disks, hard disks, punch cards, magnetic tape,
photographs, micrographics or any other information storage
device, provided that the books and records so maintained are
convertible into clearly legible written form within a reasonable
period of time. The books of the Partnership shall be maintained
for financial reporting purposes, on an accrual basis in
accordance with generally accepted accounting principles.
8.2 Fiscal Year
The fiscal year of the Partnership shall be the calendar year.
8.3 Reports.
(a) As soon as practicable, but in no event later than 120 days
after the close of each Partnership Year, the General Partner
shall cause to be mailed to each Record Holder of a Unit as of a
date selected by the General Partner in its sole discretion, an
annual report containing financial statements of the Partnership
for such Partnership Year, presented in accordance with generally
accepted accounting principles, including a balance sheet and
statements of operations, Partners' equity and cash flows, such
statements to be audited by a firm of independent public
accountants selected by the General Partner.
(b) As soon as practicable, but in no event later than 90 days
after the close of each calendar quarter except the last calendar
quarter of each Partnership Year, the General Partner shall cause
to be mailed to each Record Holder of a Unit, as of a date
selected by the General Partner in its sole discretion, a report
containing unaudited financial statements of the Partnership and
such other information as may be required by applicable law,
regulation or rule of any National Securities Exchange on which
the Units are listed for trading or as the General Partner
determines to be necessary or appropriate.
ARTICLE IX
Tax Matters
9.1 Preparation of Tax Return
The General Partner shall arrange for the preparation and
timely filing of all returns of Partnership income, gains,
deductions, losses and other items required of the Partnership
for federal and state income tax purposes and shall use
reasonable efforts to furnish, within 90 days of the close of
each taxable year of the Partnership, the tax information
reasonably required by Unitholders for federal and state income
tax reporting purposes. The classification, realization and
recognition of income, gain, losses and deductions and other
items shall be on the accrual method of accounting for federal
income tax purposes. The taxable year of the Partnership shall
be the calendar year.
9.2 Tax Elections
Except as otherwise provided herein, the General Partner shall
in its sole discretion, determine whether to make any available
election pursuant to the Code; provided, however, that the
General Partner shall make the election under Section 754 of the
Code in accordance with applicable regulations thereunder. The
General Partner shall have the right to seek to revoke any such
election (including, without limitation, the election under
Section 754 of the Code) upon the General Partner's determination
in its sole discretion that such revocation is in the best
interest of the Limited Partners and Assignees. For purposes of
computing the adjustments under Section 743(b) of the Code, the
General Partner shall be authorized (but not required), to adopt
a convention whereby the price paid by a transferee of Units will
be deemed to be the lowest quoted trading price of the Units on
any National Securities Exchange on which such Units are traded
during the calendar month in which such transfer is deemed to
occur pursuant to Section 5.2(g) without regard to the actual
price paid by such transferee.
9.3 Tax Controversies
Subject to the provisions hereof, the General Partner is
designated the Tax Matters Partner (as defined in Section 6231
of the Code), and is authorized and required to represent the
Partnership (at the Partnership's expense) in connection with all
examinations of the Partnership's affairs by tax authorities,
including, without limitation, resulting administrative and
judicial proceedings, and to expend Partnership funds for
professional services and costs associated therewith. Each
Partner and Assignee agrees to cooperate with the General Partner
and to do or refrain from doing any or all things reasonably
required by the General Partner to conduct such proceedings.
9.4 Organizational Expenses
The Partnership shall elect to deduct expenses, if any,
incurred by it in organizing the Partnership ratably over a 60-
month period as provided in Section 709 of the Code.
9.5 Withholding
Notwithstanding any other provision of this Agreement, the
General Partner is authorized to take any action that it
determines in its sole discretion to be necessary or appropriate
to cause the Partnership and the Operating Companies to comply
with any withholding requirements established under the Code or
any other federal, state or local law, including, without
limitation, pursuant to Sections 1441, 1442, 1445 and 1446 of the
Code. To the extent that the Partnership is required to withhold
and pay over to any taxing authority any amount resulting from
the allocation or distribution of income to any Partner or
Assignee (including, without limitation, by reason of Section
1446 of the Code), the amount withheld shall be treated as a
distribution of cash for purposes of Section 4.6(a) in the amount
of such withholding from such Partner.
9.6 Entity-Level Taxation
If legislation is enacted which causes the Partnership to
become treated as an association taxable as a corporation for
federal income tax purposes, then (a) with respect to any
calendar quarter thereafter, the Minimum Quarterly Distribution,
First Target Distribution, Second Target Distribution and Third
Target Distribution, as the case may be, shall be equal to the
product of (i) each such distribution amount multiplied by (ii) 1
minus the sum of (x) the expected effective federal income tax
rate applicable to the Partnership (expressed as a decimal) plus
(y) the expected effective overall state and local income tax
rate applicable to the Partnership (expressed as a decimal), in
each case, for the taxable year in which such quarter occurs
(after taking into account the benefit of any deduction allowable
for federal income tax purposes with respect to the payment of
state and local income taxes) (the "Rate"); and (b) for purposes
of determining the distributed amount under clauses (ii) and
(iii) of the definition of "Series A Preference Unit Conversion
Date," the amount of an actual distribtion after such legislation
is effective shall be deemed to be the actual distribution
divided by the Rate.
9.7 Entity-Level Deficiency Collections
If the Partnership is required by applicable law to pay any
federal, state or local income tax on behalf of, or withhold such
amount with respect to, any Partner or Assignee or any former
Partner or Assignee (a) the General Partner shall cause the
Partnership to pay such tax on behalf of such Partner or Assignee
or former Partner or Assignee from the funds of the Partnership;
(b) any amount so paid on behalf of, or withheld with respect to,
any Partner or Assignee shall be treated as a distribution of
cash to such Partner or Assignee for purposes of this Agreement,
including Section 4.6(a); and (c) to the extent any such Partner
or Assignee (but not a former Partner or Assignee) is not then
entitled to such distribution under this Agreement, the General
Partner shall be authorized without the approval of any Partner
or Assignee, to amend this Agreement insofar as is necessary to
maintain the uniformity of intrinsic tax characteristics as to
all Units and to make subsequent adjustments to distributions in
a manner which, in the reasonable judgment of the General
Partner, will make as little alteration as practicable in the
priority and amount of distributions otherwise applicable under
this Agreement and will not otherwise alter the distributions to
which Partners and Assignees are entitled under this Agreement.
If the Partnership is permitted (but not required) by applicable
law to pay any such tax on behalf of any Partner or Assignee or
former Partner or Assignee, the General Partner shall be
authorized (but not required) to cause the Partnership to pay
such tax from the funds of the Partnership and to take any action
consistent with this Section 9.7. The General Partner shall be
authorized (but not required) to take all necessary or
appropriate actions to collect all or any portion of a deficiency
in the payment of any such tax that relates to prior periods and
that is attributable to Persons who were Limited Partners or
Assignee when such deficiencies arose, from such Persons.
9.8 Opinions of Counsel
Notwithstanding any other provision of this Agreement, if the
Partnership is taxable for federal income tax purposes as a
corporation or otherwise taxed for federal income tax purposes as
an entity at any time and, pursuant to the provisions of this
Agreement, an Opinion of Counsel would otherwise be required to
the effect that an action will not cause the Partnership to
become so taxable as a corporation or other entity or to be
treated as an as association taxable as a corporation, such
requirement for an Opinion of Counsel shall be deemed
automatically waived.
ARTICLE X
Unit Certificate
10.1 Unit Certificates
Upon the Partnership's issuance of Series A Common Units or
Series A Preference Units to any Person, the Partnership shall
issue one or more Unit Certificates in the name of such Person
evidencing the number of such Units being so issued. Unit
Certificates shall be executed on behalf of the Partnership by
the General Partner. No Unit Certificate listed on a National
Securities Exchange or national securities market shall be valid
for any purpose until it has been countersigned by the Transfer
Agent or, with respect to any non-certificated Partnership
Securities, until such issuance has been otherwise validated by
the Transfer Agent.
10.2 Registration, Registration of Transfer and Exchange.
(a) The General Partner shall cause to be kept on behalf of the
Partnership a register (the "Unit Register") in which, subject to
such reasonable regulations as it may prescribe and subject to
the provisions of Section 10.2(b), the General Partner will
provide for the registration and the transfer of Units. The
Transfer Agent is hereby appointed registrar and transfer agent
for the purpose of registering and transferring Units as herein
provided. The Partnership shall not recognize transfers of
Certificates representing Units unless same are effected in the
manner described in this Section 10.2. Upon surrender for
registration of transfer of any Units evidenced by a Certificate
and subject to the provisions of Section 10.2(b), the General
Partner on behalf of the Partnership will execute, and the
Transfer Agent will countersign and deliver, in the name of the
holder or the designated transferee or transferees, as required
pursuant to the holder's instructions, one or more new
Certificates evidencing the same aggregate number of Units as was
evidenced by the Certificate so surrendered.
(b) Except as otherwise provided in Section 11.5, the
Partnership shall not recognize any transfer of Units until the
Certificates (if applicable) evidencing such Units are
surrendered for registration of transfer and such Certificates
are accompanied by a Transfer Application duly executed by the
transferee (or the transferee's attorney-in-fact duly authorized
in writing). No charge shall be imposed by the Partnership for
such transfer, provided, that, as a condition to the issuance of
any new Certificate under this Section 10.2, the General Partner
may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed with respect
thereto.
10.3 Mutilated, Destroyed, Lost or Stolen Certificates.
(a) If any mutilated Certificate is surrendered to the Transfer
Agent, the General Partner on behalf of the Partnership shall
execute, and upon its request, the Transfer Agent shall
countersign and deliver in exchange therefor, a new Certificate
evidencing the same number of Units as the Certificate so
surrendered.
(b) The General Partner on behalf of the Partnership shall
execute, and upon its request, the Transfer Agent shall
countersign and deliver a new Certificate in place of any
Certificate previously issued if the Record Holder of the
Certificate:
(i) makes proof by affidavit, in form and substance satisfactory
to the General Partner, that a previously issued Certificate has
been lost, destroyed or stolen;
(ii) requests the issuance of a new Certificate before the
Partnership has received notice that the Certificate has been
acquired by a purchaser for value in good faith and without
notice of an adverse claim;
(iii) if requested by the General Partner, delivers to the
Partnership a bond or such other form of security or indemnity as
may be required by the General Partner, in form and substance
satisfactory to the General Partner, with surety or sureties and
with fixed or open penalty as the General Partner may direct, in
its sole discretion, to indemnify the Partnership, the General
Partner and the Transfer Agent against any claim that may be made
on account of the alleged loss, destruction or theft of the
Certificate; and
(iv) satisfies any other reasonable requirements imposed by the
General Partner.
If a Limited Partner or Assignee fails to notify the Partnership
within a reasonable time after he has notice of the loss,
destruction or theft of a Certificate, and a transfer of the
Units represented by the Certificate is registered before the
Partnership, the General Partner or the Transfer Agent receives
such notification, the Limited Partner or Assignee shall be
precluded from making any claim against the Partnership, the
General Partner or the Transfer Agent for such transfer or for a
new Certificate.
(c) As a condition to the issuance of any Certificate under this
Section 10.3, the General Partner may require the payment of a
sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses
(including, without limitation, the fees and expenses of the
Transfer Agent) connected therewith.
10.4 Record Holder
In accordance with Section 10.2(b), the Partnership shall be
entitled to recognize the Record Holder as the Limited Partner or
Assignee with respect to any Common Units or Preference Units
and, accordingly, shall not be bound to recognize any equitable
or other claim to or interest in such Common Units or Preference
Units on the part of any other Person, whether or not the
Partnership shall have actual or other notice thereof, except as
otherwise provided by law or any applicable rule, regulation,
guideline or requirement of any National Securities Exchange on
which the Common Units or Preference Units are listed for
trading. Without limiting the foregoing, when a Person (such as
a broker, dealer, bank trust company or clearing corporation or
an agent of any of the foregoing) is acting as nominee, agent or
in some other representative capacity for another Person in
acquiring and/or holding Common Units or Preference Units, as
between the Partnership on the one hand and such other Persons on
the other hand such representative Person (a) shall be the
Limited Partner or Assignee (as the case may be) of record and
beneficially, (b) must execute and deliver a Transfer Application
and (c) shall be bound by this Agreement and shall have the
rights and obligations of a Limited Partner or Assignee (as the
case may be) hereunder and as provided for herein.
ARTICLE XI
Transfer of Interests
11.1 Transfer.
(a) The term "transfer," when used in this Article XI with
respect to a Partnership Interest, shall be deemed to refer to an
appropriate transaction by which the General Partner assigns its
Partnership Interest as General Partner to another Person or by
which the holder of a Unit assigns such Unit to another Person
who is or becomes an Assignee and includes a sale, assignment,
gift, pledge, encumbrance, hypothecation, mortgage, exchange or
any other disposition by law or otherwise.
(b) No Partnership Interest shall be transferred in whole or in
part, except in accordance with the terms and conditions set
forth in this Article XI. Any transfer or purported transfer of
a Partnership Interest not made in accordance with this
Article XI shall be null and void.
11.2 Transfer of General Partner's Partnership Interest.
(a) Except as set forth in this Section 11.2(a), the General
Partner may transfer all, but not less than all, of its
Partnership Interest as the general partner to a single
transferee if, but only if, (i) at least a majority of the
Outstanding Voting Units (excluding for this purpose Units held
by the General Partner and its Affiliates) approve of such
transfer and of the admission of such transferee as general
partner, (ii) the transferee agrees to assume the rights and
duties of the General Partner and be bound by the provisions of
this Agreement and the Operating Company Agreements, (iii) the
transferee certifies that it is an Eligible Citizen and (iv) the
Partnership receives an Opinion of Counsel that such transfer
would not result in the loss of limited liability of any Limited
Partner or of the Partnership as a member of the Operating
Companies or cause the Partnership or the Operating Companies to
be taxable as a corporation or otherwise taxed as an entity for
federal income tax purposes. The foregoing notwithstanding, the
General Partner is expressly permitted to pledge its Partnership
Interest as General Partner to secure the obligations of the
Partnership under the Revolving Credit Facility, as the same may
be amended, supplemented, replaced, refinanced or restated from
time to time, or any successor or subsequent loan agreement.
(b) Neither Section 11.2(a) nor any other provision of this
Agreement shall be construed to prevent (and all Partners do
hereby consent to) (i) the transfer by the General Partner of all
of its Partnership Interest as a general partner to an Affiliate
or (ii) the transfer by the General Partner of all its
Partnership Interest as a general partner upon its merger or
consolidation with or other combination into any other Person or
the transfer by it of all or substantially all of its assets to
another Person if, in the case of a transfer described in either
clause (i) or (ii) of this sentence, the rights and duties of the
General Partner with respect to the Partnership Interest so
transferred are assumed by the transferee and the transferee
agrees to be bound by the provisions of this Agreement and the
Operating Companies Agreement; provided, that in either such
case, such transferee certifies that it is an Eligible Citizen,
and furnishes to the Partnership an Opinion of Counsel that such
merger, consolidation, combination, transfer or assumption will
not result in a loss of limited liability of any Limited Partner
or of the Partnership as a member of the Operating Companies or
cause the Partnership or the Operating Companies to be taxable as
a corporation or otherwise taxed as an entity for federal income
tax purpose. In the case of a transfer pursuant to this
Section 11.2(b), the transferee or successor (as the case may be)
shall be admitted to the Partnership as the General Partner
immediately prior to the transfer of the Partnership Interest,
and the business of the Partnership shall continue without
dissolution.
11.3 Transfer of Units.
(a) Units may be transferred only in the manner described in
Section 10.2. The transfer of any Units and the admission of any
new Partner shall not constitute an amendment to this Agreement.
(b) Until admitted as a Substituted Limited Partner pursuant to
Article XII, the Record Holder of a Unit shall be an Assignee in
respect of such Unit. Limited Partners may include custodians,
nominees or any other individual or entity in its own or any
representative capacity.
(c) Each distribution in respect of Units shall be paid by the
Partnership, directly or through the Transfer Agent or through
any other Person or agent, only to the Record Holders thereof as
of the Record Date set for the distribution. Such payment shall
constitute full payment and satisfaction of the Partnership's
liability in respect of such payment, regardless of any claim of
any Person who may have an interest in such payment by reason of
an assignment or otherwise.
(d) A transferee who has completed and delivered a Transfer
Application shall be deemed to have (i) requested admission as a
Substituted Limited Partner, (ii) agreed to comply with and be
bound by and to have executed this Agreement, (iii) represented
and warranted that such transferee has the capacity and authority
to enter into this Agreement, and that such transferee is an
Eligible Citizen, (iv) made the powers of attorney set forth in
this Agreement and (v) given the consents and made the waivers
contained in this Agreement.
11.4 Restrictions on Transfers
Notwithstanding the other provisions of this Article XI, no
transfer of any Common Unit or Preference Unit or interest
therein of any Limited Partner or Assignee shall be made if such
transfer would (a) violate the then applicable federal or state
securities laws or rules and regulations of the Securities and
Exchange Commission, any state securities commission or any other
governmental authorities with jurisdiction over such transfer,
(b) cause the Partnership to be taxable as a corporation or
otherwise taxed as an entity for federal income tax purposes or
(c) affect the Partnership's existence or qualification as a
limited partnership under the Delaware Act.
11.5 Citizenship Certificates; Non-citizen Assignees.
(a) At any time and from time to time a Limited Partner or
Assignee shall, within thirty days after a written request
therefor by the General Partner, furnish to the General Partner,
an executed Citizenship Certification or such other information
concerning his nationality, citizenship or other status (or, if
the Limited Partner or Assignee is a nominee holding for the
account of another Person, the nationality, citizenship or other
status of such Person) as the General Partner may request. If a
Limited Partner or Assignee fails to furnish to the General
Partner within the aforementioned 30-day period such Citizenship
Certification or other requested information or if upon receipt
of such Citizenship Certification or other requested information
the General Partner determines, with the advice of counsel, that
a Limited Partner or Assignee is not an Eligible Citizen, the
Units owned by such Limited Partner or Assignee shall be subject
to redemption in accordance with the provisions of Section 11.6.
In addition, the General Partner may require that the status of
any such Limited Partner or Assignee be changed to that of a Non-
citizen Assignee, and, thereupon, the General Partner shall be
substituted for such Non-citizen Assignee as the Limited Partner
in respect of his Units.
(b) The General Partner shall in exercising voting rights in
respect of Units held by it on behalf of Non-citizen Assignees,
distribute the votes in the same ratios as the votes of Limited
Partners in respect of Units of the same class other than those
of Non-citizen Assignees are cast either for, against or
abstaining as to the matter.
(c) Upon dissolution of the Partnership, a Non-citizen Assignee
shall have no right to receive a distribution in kind pursuant to
Section 14.4 but shall be entitled to the cash equivalent
thereof, and the General Partner shall provide cash in exchange
for an assignment of the Non-citizen Assignee's share of the
distribution in kind. Such payment and assignment shall be
treated for Partnership purposes as a purchase by the General
Partner from the Non-citizen Assignee of his Partnership Interest
(representing his right to receive his share of such distribution
in kind).
(d) At any time after he can and does certify that he has become
an Eligible Citizen, a Non-citizen Assignee may, upon application
to the General Partner, request admission as a Substituted
Limited Partner with respect to any Units of such Non-citizen
Assignee not redeemed pursuant to Section 11.6, and, upon the Non-
citizen Assignee's admission pursuant to Section 12.2, the
General Partner shall cease to be deemed to be the Limited
Partner in respect of the Non-citizen Assignee's Units.
11.6 Redemption of Interests.
(a) If at any time a Limited Partner or Assignee fails to
furnish a Citizenship Certification or other information
requested within the 30-day period specified in Section 11.5(a),
or if upon receipt of such Citizenship Certification or other
information the General Partner determines, with the advice of
counsel, that a Limited Partner or Assignee is not an Eligible
Citizen, the Partnership may, unless the Limited Partner or
Assignee establishes to the satisfaction of the General Partner
that such Limited Partner or Assignee is an Eligible Citizen or
has transferred his Units to a Person who furnishes a Citizenship
Certification to the General Partner prior to the date fixed for
redemption as provided below, redeem the Partnership Interest of
such Limited Partner or Assignee as follows:
(i) The General Partner shall not later than the 30th day before
the date fixed for redemption, give notice of redemption to the
Limited Partner or Assignee, at his last address designated on
the records of the Partnership or the Transfer Agent, by
registered or certified mail, postage prepaid. The notice shall
be deemed to have been given when so mailed. The notice shall
specify the Redeemable Units, the date fixed for redemption, the
place of payment, that payment of the redemption price will be
made upon surrender of the Certification evidencing the
Redeemable Units and that on and after the date fixed for
redemption no further allocations or distributions to which the
Limited Partner or Assignee would otherwise be entitled in
respect of the Redeemable Units will accrue or be made.
(ii) The aggregate redemption price for Redeemable Units shall be
an amount equal to the Current Market Price (the date of
determination of which shall be the date fixed for redemption) of
Units of the class to be so redeemed multiplied by the number of
Units of each such class included among the Redeemable Units.
The redemption price shall be paid in the sole discretion of the
General Partner, in cash or by delivery of a promissory note of
the Partnership in the principal amount of the redemption price,
bearing interest at the rate of 10% annually and payable in three
equal annual installments of principal together with accrued
interest commencing one year after the redemption date.
(iii) Upon surrender by or on behalf of the Limited Partner
or Assignee, at the place specified in the notice of redemption,
of the Certificate evidencing the Redeemable Units, duly endorsed
in blank or accompanied by an assignment duly executed in blank,
the Limited Partner or Assignee or his duly authorized
representative shall be entitled to receive the payment therefor.
(iv) After the redemption date, Redeemable Units shall no longer
constitute issued and Outstanding Units.
(b) The provisions of this Section 11.6 shall also be applicable
to Units held by a Limited Partner or Assignee as nominee of a
Person determined to be other than an Eligible Citizen.
(c) Nothing in this Section 11.6 shall prevent the recipient of
a notice of redemption from transferring his Units before the
redemption date if such transfer is otherwise permitted under
this Agreement. Upon receipt of notice of such a transfer, the
General Partner shall withdraw the notice of redemption;
provided, the transferee of such Units certifies in the Transfer
Application that he is an Eligible Citizen. If the transferee
fails to make such certification, such redemption shall be
effected from the transferee on the original redemption date.
(d) If the Partnership is or becomes subject to any federal,
state or local law or regulation which, in the reasonable
determination of the General Partner, provides for the
cancellation or forfeiture of any property in which the
Partnership or the Operating Companies have an interest, based on
the nationality (or other status) of the General Partner, whether
or not in its capacity as such, the Partnership may, unless the
General Partner has furnished a Citizenship Certification or
transferred its Partnership Interest or Units to a Person who
furnishes a Citizenship Certification prior to the date fixed for
redemption, redeem the Partnership Interest or Interests of the
General Partner in the Partnership pursuant to Section 11.6(a),
which redemption shall also constitute redemption of the general
partner interest of the general partner of the Operating
Companies. If such redemption includes a redemption of the
Combined Interest, the redemption price thereof shall be equal to
the aggregate sum of the Current Market Price (the date of
determination for which shall be the date fixed for redemption)
of each class of Units then Outstanding in each such case
multiplied by the number of Units of such class into which the
Combined Interest would then be convertible under the terms of
Section 13.3(b) if the General Partner were to withdraw or be
removed as the General Partner (the date of determination for
which shall be the date fixed for redemption). The redemption
price shall be paid in cash or by delivery of a promissory note
of the Partnership in the principal amount of the redemption
price, bearing interest at the rate of 10% annually and payable
in three equal annual installments of principal, together with
accrued interests, commencing one year after the redemption date.
ARTICLE XII
Admission of Partners
12.1 Admission of Initial Limited Partners
Upon the issuance by the Partnership of Common Units or
Preference Units to the Underwriters as described in
Section 4.3(b) and the execution by each such party of a Transfer
Application, the General Partner shall admit the Underwriters to
the Partnership as Initial Limited Partners in respect of the
Units.
12.2 Admission of Substituted Limited Partners
By transfer of a Unit in accordance with Article XI, the
transferor shall be deemed to have given the transferee the right
to seek admission as a Substituted Limited Partner subject to the
conditions of, and in the manner permitted under, this Agreement.
A transferor of a Certificate shall, however, only have the
authority to convey to a purchaser or other transferee who does
not execute and deliver a Transfer Application (i) the right to
negotiate such Certificate to a purchaser or other transferee and
(ii) the right to transfer the right to request admission as a
Substituted Limited Partner to such purchaser or other transferee
in respect of the transferred Units. Each transferee of a Unit
(including, without limitation, any nominee holder or an agent
acquiring such Unit for the account of another Person) who
executes and delivers a Transfer Application shall, by virtue of
such execution and delivery, be an Assignee and be deemed to have
applied to become a Substituted Limited Partner with respect to
the Units so transferred to such Person. Such Assignee shall
become a Substituted Limited Partner (i) at such time as the
General Partner consents thereto, which consent may be given or
withheld in the General Partner's sole discretion, and (ii) when
any such admission is shown on the books and records of the
Partnership. If such consent is withheld such transferee shall
be an Assignee. An Assignee shall have an interest in the
Partnership equivalent to that of a Limited Partner with respect
to allocations and distributions, including, without limitation,
liquidating distributions, of the Partnership. With respect to
voting rights attributable to Units that are held by Assignees,
the General Partner shall be deemed to be the Limited Partner
with respect thereto and shall, in exercising the voting rights
in respect of such Units on any matter, vote such Units at the
written direction of the Assignee who is the Record Holder of
such Units. If no such written direction is received, such Units
will not be voted. An Assignee shall have no other rights of a
Limited Partner.
12.3 Admission of Successor General Partner
A successor General Partner approved pursuant to Section 13.1
or 13.2 or the transferee of or successor to all of the General
Partner's Partnership Interest pursuant to Section 11.2 who is
proposed to be admitted as a successor General Partner shall be
admitted to the Partnership as the General Partner, effective
immediately prior to the withdrawal or removal of the General
Partner pursuant to Section 13.1 or 13.2 or the transfer of the
General Partner's Partnership Interest pursuant to Section 11.2;
provided, however, that no such successor shall be admitted to
the Partnership until compliance with the terms of Section 11.2
has occurred. Any such successor shall carry on the business of
the Partnership without dissolution. In each case, the admission
shall be subject to the successor General Partner executing and
delivering to the Partnership an acceptance of all of the terms
and conditions of this Agreement and such other documents or
instruments as may be requited to effect the admission.
12.4 Admission of Additional Limited Partners.
(a) A Person (other than the General Partner, an Initial Limited
Partner or a Substituted Limited Partner) who makes a Capital
Contribution to the Partnership in accordance with this Agreement
shall be admitted to the Partnership as an Additional Limited
Partner only upon furnishing to the General Partner (i) evidence
of acceptance in form satisfactory to the General Partner of all
of the terms and conditions of this Agreement, including, without
limitation, the power of attorney granted in Section 1.4, (ii) a
certification that he is an Eligible Citizen and (iii) such other
documents or instruments as may be required in the discretion of
the General Partner to effect such Person's admission as an
Additional Limited Partner.
(b) Notwithstanding anything to the contrary in this
Section 12.4, no Person shall be admitted as an Additional
Limited Partner without the consent of the General Partner, which
consent may be given or withheld in the General Partner's sole
discretion. The admission of any Person as an Additional Limited
Partner shall become effective on the date upon which the name of
such Person is recorded on the books and records of the
Partnership, following the consent of the General Partner to such
admission.
12.5 Amendment of Agreement and Certificate of Limited
Partnership
To effect the admission to the Partnership of any Partner, the
General Partner shall take all steps necessary and appropriate
under the Delaware Act to amend the records of the Partnership
and if necessary, to prepare as soon as practical an amendment of
this Agreement and if required by law, to prepare and file an
amendment to the Certificate of Limited Partnership and may for
this purpose, among others, exercise the power of attorney
granted pursuant to Section 1.4.
ARTICLE XIII
Withdrawal or Removal of Partners
13.1 Withdrawal of the General Partner.
(a) The General Partner shall be deemed to have withdrawn from
the Partnership upon the occurrence of any one of the following
events (each such event herein referred to as an "Event of
Withdrawal"):
(i) the General partner voluntarily withdraws from the
Partnership by giving written notice to the other Partners;
(ii) the General Partner transfers all of its rights as general
partner pursuant to Section 11.2;
(iii) the General Partner is removed pursuant to
Section 13.2;
(iv) the General Partner (A) makes a general assignment for the
benefit of creditors; (B) files a voluntary bankruptcy petition;
(C) files a petition or answer seeking for itself a
reorganization, arrangement, composition, readjustment
liquidation, dissolution or similar relief under any law; (D)
files an answer or other pleading admitting or failing to contest
the material allegations of a petition filed against the General
Partner in a proceeding of the type described in clauses (A) -
(C) of this sentence; or (E) seeks, consents to or acquiesces in
the appointment of a trustee, receiver or liquidator of the
General Partner or of all or any substantial part of its
properties;
(v) a final and non-appealable judgment is entered by a court
with appropriate jurisdiction ruling that the General Partner is
bankrupt or insolvent or a final and non-appealable order for
relief is entered by a court with appropriate jurisdiction
against the General Partner, in each case under any federal or
state bankruptcy or insolvency laws as now or hereafter in
effect; or
(vi) a certificate of dissolution or its equivalent is filed for
the General Partner, or 90 days expire after the date of notice
to the General Partner of revocation of its charter without a
reinstatement of its charter, under the laws of its state of
incorporation.
If an Event of Withdrawal specified in this Section 13.1(a)(iv),
(v) or (vi) occurs, the withdrawing General Partner shall give
written notice to the Limited Partners within 30 days after such
occurrence. The Partners hereby agree that only the Events of
Withdrawal described in this Section 13.1 shall result in the
withdrawal of the General Partner from the Partnership.
(b) Withdrawal of the General Partner from the Partnership upon
the occurrence of an Event of Withdrawal will not constitute a
breach of this Agreement under the following circumstances: (i)
at any time during the period prior to January 1, 2003, the
General Partner voluntarily withdraws by giving at least 90 days'
advance notice of its intention to withdraw to the Limited
Partners; provided, that prior to the effective date of such
withdrawal, the withdrawal is approved by at least a majority of
the Outstanding Voting Units (excluding for this purpose Units
held by the General Partner and its Affiliates) and the General
Partner provides to the Partnership an Opinion of Counsel
("Withdrawal Opinion of Counsel") that following the election of
a successor General Partner, the General Partner's withdrawal
would not result in the loss of limited liability of any Limited
Partner or of the Partnership as a member of the Operating
Companies or cause the Partnership or any Operating Company to be
taxable as a corporation or otherwise taxed as an entity for
federal income tax purposes; (ii) at any time after December 31,
2002, the General Partner voluntarily withdraws by giving at
least 90 days' advance notice to the Limited Partners, such
withdrawal to take effect on the date specified in such notice;
(iii) at any time that the General Partner ceases to be a General
Partner pursuant to Section 13.1(a)(ii) or is removed pursuant to
Section 13.2; or (iv) notwithstanding clause (i) of this
sentence, at any time that the General Partner voluntarily
withdraws by giving at least 90 days' advance notice of its
intention to withdraw to the Limited Partners, such withdrawal to
take effect on the date specified in the notice, if at the time
such notice is given one Person and its Affiliates (other than
the General Partner and its Affiliates) own beneficially or of
record or control at least 50% of the Outstanding Voting Units.
The withdrawal of the General Partner from the Partnership upon
the occurrence of an Event of Withdrawal shall also constitute
the withdrawal of the general partner as a member of the
Operating Companies. If the General Partner gives a notice of
withdrawal pursuant to Section 13.1(a)(i), holders of at least a
majority of such Outstanding Voting Units (excluding for purposes
of such determination Units owned by the General Partner and its
Affiliates) may, prior to the effective date of such withdrawal,
elect a successor General Partner. If, prior to the effective
date of the General Partner's withdrawal, a successor is not
selected by the Limited Partners as provided herein or the
Partnership does not receive a Withdrawal Opinion of Counsel, the
Partnership shall be dissolved in accordance with Section 14.1.
If a successor General Partner is elected and a Withdrawal
Opinion of Counsel is rendered such successor shall be admitted
(subject to Section 12.3) immediately prior to the effective time
of the withdrawal or removal of the Departing Partner and shall
continue the business of the Partnership and the Operating
Companies without dissolution.
13.2 Removal of the General Partner
The General Partner may be removed with or without Cause if
such removal is approved by at least 55% of the Outstanding
Voting Units. Any such action by such Limited Partners for
removal of the General Partner also must provide for the election
of a new General Partner by the holders of a majority of the
Outstanding Voting Units. Such removal shall be effective
immediately following the admission of the successor General
Partner pursuant to Article XII. The right of such Limited
Partners to remove the General Partner shall not exist or be
exercised unless the Partnership has received an Opinion of
Counsel opining as to the matters covered by a Withdrawal Opinion
of Counsel. Any such successor General Partner shall be subject
to the provisions of Section 12.3.
13.3 Interest of Departing Partner and Successor General Partner.
(a) In the event of (i) withdrawal of the General Partner under
circumstances where such withdrawal does not violate this
Agreement or (ii) removal of the General Partner by the Limited
Partners under circumstances where Cause does not exist, the
Departing Partner shall, at its option exercisable prior to the
effective date of the departure of such Departing Partner,
promptly receive from its successor in exchange for its
Partnership Interest as General Partner an amount in cash equal
to the fair market value of the Departing Partner's Partnership
Interest as General Partner, such amount to be determined and
payable as of the effective date of its departure. If the General
Partner withdraws under circumstances where such withdrawal
violates this Agreement or if the General Partner is removed by
the Limited Partners under circumstances where Cause exists, the
General Partner's successor shall have the option described in
the immediately preceding sentence, and the Departing Partner
shall not have such option. In either case, if the successor
acquires the Departing Partner's Partnership Interest as General
Partner, such successor General Partner, if requested by the
Departing Partner, must also acquire at such time each non-
managing interest of such Departing Partner or its Affiliate as a
member of the Operating Companies, for an amount in cash equal to
the fair market value of such interest determined as of the
effective date of its departure. In either case, the Departing
Partner shall be entitled to receive all reimbursements due such
Departing Partner pursuant to Section 6.4, including, without
limitation, any employee-related liabilities (including, without
limitation, severance liabilities), incurred in connection with
the termination of any employees employed by the General Partner
for the benefit of the Partnership or the Operating Companies.
Subject to Section 13.3(b), the Departing Partner shall, as of
the effective date of its departure, cease to share in any
allocations or distributions with respect to its Partnership
Interest as the General Partner and Partnership income, gain,
loss deduction and credit will be prorated and allocated as set
forth in Section 5.2(g).
For purposes of this Section 13.3(a), the fair market value
of the Departing Partner's Partnership Interest as General
Partner and each non-managing interest of such Departing Partner
or its Affiliate, as the case may be, as a member of the
Operating Companies (collectively, the "Combined Interest") shall
be determined by agreement between the Departing Partner and its
successor or, failing agreement within 30 days after the
effective date of such Departing Partner's departure, by an
independent investment banking firm or other independent expert
selected by the Departing Partner and its successor, which, in
turn, may rely on other experts and the determination of which
shall be conclusive as to such matter. If such parties cannot
agree upon one independent investment banking firm or other
independent expert within 45 days after the effective date of
such departure, then the Departing Partner shall designate an
independent investment banking firm or other independent expert,
the Departing Partner's successor shall designate an independent
investment banking firm or other independent expert, and such
firms or experts shall mutually select a third independent
investment banking firm or independent expert, which shall
determine the fair market value of the Combined Interest. In
making its determination, such independent investment banking
firm or other independent expert shall consider the then current
trading price of Units on any National Securities Exchange on
which Units are then listed the value of the Partnership's
assets, the rights and obligations of the General Partner and
other factors it may deem relevant.
(b) If the Departing Partner's Partnership Interest as General
Partner is not acquired in the manner set forth in
Section 13.3(a), the Departing Partner and its Affiliate, to the
extent applicable, shall become a Limited Partner and their
Partnership Interest as General Partner and, at their election,
their non-managing interest in the Operating Companies, shall be
converted into Units pursuant to a valuation made by an
investment banking firm or other independent expert selected
pursuant to Section 13.3(a), without reduction in such
Partnership Interest (but subject to proportionate dilution by
reason of the admission of its successor). For purposes of this
Agreement, conversion of the General Partner's Partnership
Interest to Units will be characterized as if the General Partner
contributed its Partnership Interest to the Partnership in
exchange for the newly issued Units. Any successor General
Partner shall indemnify the Departing Partner as to all debts and
liabilities of the Partnership arising on or after the date on
which the Departing Partner becomes a Limited Partner.
(c) If the option described in Section 13.3(a) is not exercised
by the party entitled to do so, the successor General Partner
shall at the effective date of its admission to the Partnership,
contribute to the capital of the Partnership cash in an amount
such that its Capital Account, after giving effect to such
contribution and any adjustments made to the Capital Accounts of
all Partners pursuant to Section 4.6(d)(i), shall be equal to one
percent (1%) of the Capital Accounts of all Partners. In such
event, each successor General Partner shall, subject to the
following sentence, be entitled to such percentage interest of
all Partnership allocations and distributions and any other
allocations and distributions to which the Departing Partner was
entitled. In addition, such successor General Partner shall
cause this Agreement to be amended to reflect that, from and
after the date of such successor General Partner's admission, the
successor General Partner's interest in all Partnership
distributions and allocations shall be 1%, and that of the
Unitholders shall be 99%.
13.4 Withdrawal of Limited Partners
No Limited Partner shall have any right to withdraw from the
Partnership; provided, however, that when a transferee of a
Limited Partner's Units becomes a Record Holder, such
transferring Limited Partner shall cease to be a Limited Partner
with respect to the Units so transferred.
ARTICLE XIV
Dissolution and Liquidation
14.1 Dissolution
The Partnership shall not be dissolved by the admission of
Substituted Limited Partners or Additional Limited Partners or by
the admission of a successor General Partner in accordance with
the terms of this Agreement. Upon the removal or withdrawal of
the General Partner, any successor General Partner shall continue
the business of the Partnership. The Partnership shall dissolve,
and its affairs should be wound up, upon:
(a) the expiration of its term as provide in Section 1.5;
(b) an Event of Withdrawal of the General Partner as provided in
Section 13.1(a) (subject to Section 14.2) (other than Section
13.1(a)(ii)), unless a successor is elected and an Opinion of
Counsel is received as provided in Section 13.1(b) or Section
13.2, as the case may be, and such successor is admitted to the
Partnership pursuant to Section 12.3;
(c) an election to dissolve the Partnership by the General
Partner that is approved by the holders of at least 662/3% of the
Outstanding Voting Units (and all Limited Partners hereby
expressly consent that such approval may be effected upon written
consent of the holders of at least 662/3% of the Outstanding
Voting Units);
(d) entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the Delaware Act; or
(e) the sale of all or substantially all of the assets and
properties of the Partnership or all of the Operating Companies,
taken as a whole.
14.2 Continuation of the Business of the Partnership after
Dissolution
Upon (i) dissolution of the Partnership following an Event of
Withdrawal caused by the withdrawal or removal of the General
Partner and a failure of the requisite number of Partners to
appoint a successor General Partner as provided in Section 13.1
or 13.2, as the case may be, then within an additional 90 days or
(ii) dissolution of the Partnership upon an event constituting an
Event of Withdrawal described in Section 13.1(a)(iv), then within
180 days thereafter, at least 662/3% of the Outstanding Voting
Units may elect to reconstitute the Partnership and continue its
business on the same terms and conditions set forth in this
Agreement by forming a new limited partnership on terms identical
to those set forth in this Agreement and having as a general
partner a Person approved by the holders of at least 662/3% of
the Outstanding Voting Units. Upon any such election by the
holders of at least 662/3% of the Outstanding Voting Units, all
Partners shall be bound thereby and shall be deemed to have
approved thereof.
Unless such an election is made within the applicable time period
as set forth above, the Partnership shall conduct only activities
necessary to wind up its affairs. If such an election is so
made, then:
(a) the reconstituted Partnership shall continue until the end
of the term set forth in Section 1.5 unless earlier dissolved in
accordance with this Article XIV;
(b) if the successor General Partner is not the former General
Partner, then the interest of the former General Partner shall be
treated thenceforth as the interest of a Limited Partner and
converted into Units in the manner provided in Section 13.3(b);
and
(c) all necessary steps shall be taken to cancel this Agreement
and the Certificate of Limited Partnership and to enter into and
as necessary, to file a new partnership agreement and certificate
of limited partnership, and the successor general partner may for
this purpose exercise the powers of attorney granted the General
Partner pursuant to Section 1.4; provided that the right of at
least 662/3% of Outstanding Voting Units to approve a successor
general partner and to reconstitute and to continue the business
of the Partnership shall not exist and may not be exercised
unless the Partnership has received an Opinion of Counsel that
(x) the exercise of the right would not result in the loss of
limited liability of any Limited Partner and (y) neither the
Partnership, the reconstituted limited partnership nor the
Operating Companies would become taxable as a corporation or
otherwise be taxed as an entity for federal income tax purposes
upon the exercise of such right to continue.
14.3 Liquidation
Upon dissolution of the Partnership, unless the Partnership is
continued under an election to reconstitute and continue the
Partnership pursuant to Section 14.2, the General Partner, or in
the event the General Partner has been dissolved or removed,
become bankrupt as set forth in Section 13.1 or withdrawn from
the Partnership, a liquidator or liquidating committee approved
by at least a majority of the Outstanding Voting Units, shall be
the Liquidator. The Liquidator (if other than the General
Partner) shall be entitled to receive such compensation for its
services as may be approved by at least a majority of the
Outstanding Voting Units. The Liquidator shall agree not to
resign at any time without 15 days' prior written notice and (if
other than the General Partner) may be removed at any time, with
or without Cause by notice of removal approved by at least a
majority of the Outstanding Voting Units. Upon dissolution,
removal or resignation of the Liquidator, a successor and
substitute Liquidator (who shall have and succeed to all rights,
powers and duties of the original Liquidator) shall within 30
days thereafter be approved by at least a majority of the
Outstanding Voting Units. The right to approve a successor or
substitute Liquidator in the manner provided herein shall be
deemed to refer also to any such successor or substitute
Liquidator approved in the manner herein provided. Except as
expressly provided in this Article XIV, the Liquidator approved
in the manner provided herein shall have and may exercise,
without further authorization or consent of any of the parties
hereto, all of the powers conferred upon the General Partner
under the terms of this Agreement (but subject to all of the
applicable limitations, contractual and otherwise, upon the
exercise of such powers, other than the limitation on sale set
forth in Section 6.3(b)) to the extent necessary or desirable in
the good faith judgment of the Liquidator to carry out the duties
and functions of thc Liquidator hereunder for and during such
period of time as shall be reasonably required in the good faith
judgment of the Liquidator to complete the winding up and
liquidation of the Partnership as provided for herein. The
Liquidator shall liquidate the assets of the Partnership, and
apply and distribute the proceeds of such liquidation in the
following order of priority, unless otherwise required by
mandatory provisions of applicable law:
(a) First, the payment to creditors of the Partnership,
including, without limitation, Partners who are creditors, in the
order of priority provided by law; and the creation of a reserve
of cash or other assets of the Partnership for contingent
liabilities in an amount if any, determined by the Liquidator to
be appropriate for such purposes; and
(b) Second, to all Partners in accordance with the positive
balances in their respective Capital Accounts after taking into
account adjustments to such Capital Accounts pursuant to Section
5.1(c); and
(c) Third, to all Partners in accordance with their respective
partnership interests.
14.4 Distributions in Kind.
(a) Notwithstanding the provisions of Section 14.3, which
require the liquidation of the assets of the Partnership, but
subject to the order of priorities set forth therein, if prior to
or upon dissolution of the Partnership the Liquidator determines
that an immediate sale of part or all of the Partnership's assets
would be impractical or would cause undue loss to the Partners,
the Liquidator may, in its absolute discretion, defer for a
reasonable time the liquidation of any assets except those
necessary to satisfy liabilities of the Partnership (including,
without limitation, those to Partners as creditors) or distribute
to the Partners, in lieu of cash, as tenants in common add in
accordance with the provisions of Section 14.3, undivided
interests in such Partnership assets as the Liquidator deems not
suitable for liquidation. Any such distributions in kind shall
be made only if, in the good faith judgment of the Liquidator,
such distributions in kind are in the best interest of the
Limited Partners and shall be subject to such conditions relating
to the disposition and management of such properties as the
Liquidator deems reasonable and equitable and to any agreement
governing the operation of such properties at such time. The
Liquidator shall determine the fair market value of any property
distributed in kind using such reasonable method of valuation as
it may adopt.
(b) In accordance with Section 704(c)(1)(B) of the Code, in the
case of any deemed distribution occurring as a result of a
termination of the Partnership pursuant to Section 708(b)(1)(B)
of the Code, to the maximum extent possible consistent with the
priorities of Section 14.3, the General Partner shall have sole
discretion to treat the deemed distribution of Partnership assets
to Partners as occurring in a manner that will not cause a shift
of the Book-Tax Disparity attributable to a Partnership asset
existing immediately prior to the deemed distribution to another
asset upon the deemed contribution of assets to the reconstituted
Partnership, including, without limitation, deeming the
distribution of any Partnership assets to be made either to the
Partner who contributed such assets or to the transferee of such
Partner.
14.5 Cancellation of Certificate of Limited Partnership
Upon the completion of the distribution of Partnership cash
and property as provided in Sections 14.3 and 14.4, the
Partnership shall be terminated and the Certificate of Limited
Partnership and all qualifications of the Partnership as a
foreign limited partnership in jurisdictions other than the State
of Delaware shall be canceled and such other actions as may be
necessary to terminate the Partnership shall be taken.
14.6 Reasonable Time for Winding Up
A reasonable time shall be allowed for the orderly winding up
of business and affairs of the Partnership and the liquidation of
its assets pursuant to Section 14.3 in order to minimize any
losses otherwise attendant upon such winding up, and the
provisions of this Agreement shall remain in effect between the
Partners during the period of liquidation, and shall have no
obligation to contribute or loan any monies or property to the
Partnership to enable the Partnership to effectuate.
14.7 Return of Capital
The General Partner shall not be personally liable for the
return of the Capital Contributions of the Limited Partners, or
any portion thereof, it being expressly understood that any such
return shall be made solely from Partnership assets.
14.8 Capital Account Restoration
No Partner shall have any obligation to restore any negative
balance in its Capital Account upon liquidation of the
Partnership.
14.9 Waiver of Partition
Each Partner hereby waives any right to partition of the
Partnership property.
ARTICLE XV
Amendment of Partnership Agreement; Meetings; Record Date
15.1 Amendments to be Adopted Solely by General Partner
Each Limited Partner agrees that the General Partner (pursuant
to its powers of attorney from the Limited Partners and
Assignees), without the approval of any Limited Partner or
Assignee, may amend any provision of this Agreement, and execute,
swear to, acknowledge, deliver, file and record whatever
documents may be required in connection therewith, to reflect:
(a) a change in the name of the Partnership, the location of the
principal place of business of the Partnership, the registered
agent of the Partnership or the registered office of the
Partnership;
(b) admission, substitution, withdrawal or removal of Partners
in accordance with this Agreement;
(c) a change that, in the sole discretion of the General
Partner, is reasonable and necessary or appropriate to qualify or
continue qualification of the Partnership as a limited
partnership or a partnership in which the limited partners have
limited liability under the laws of any state or that is
necessary or advisable in the opinion of the General Partner to
ensure that the Partnership will not be taxable as a corporation
or otherwise taxed as an entity for federal income tax purposes;
(d) a change (i) that, in the sole discretion of the General
Partner, does not adversely affect the Limited Partnership in any
material respect, (ii) that is necessary or appropriate to
satisfy any requirements, conditions, guidelines or
interpretations contained in any opinion, interpretative release,
directive, order, ruling or regulation of any federal or state
agency or judicial authority or contained in any federal or state
agency or judicial authority or contained in any federal or state
statute (including, without limitation, the Delaware Act) or that
is necessary or appropriate to facilitate the trading of the
Units (including, without limitation, the division of Outstanding
Units into different classes to facilitate uniformity of tax
consequences within such classes of Units) or comply with any
rule, regulation, interpretative release, guideline or
requirement of any National Securities Exchange on which the
Units are or will be listed for trading, compliance with any of
which the General Partner determines in its sole discretion to be
in the best interests of the Partnership and the Limited Partners
or (iii) that is required to effect the intent of the provisions
of this Agreement or is otherwise contemplated by this Agreement;
(e) an amendment that is necessary, in the Opinion of Counsel,
to prevent the Partnership or the General Partner or its
directors or officers from in any manner being subjected to the
provisions of the Investment Company Act of 1940, as amended the
Investment Advisers Act of 1940, as amended, or "plan asset"
regulations adopted under the Employee Retirement Income Security
Act of 1974, as amended, whether or not substantially similar to
plan asset regulations currently applied or proposed by the
United States Department of Labor;
(f) subject to the terms of Section 4.4, an amendment that the
General Partner determines in its sole discretion to be necessary
or appropriate in connection with the authorization for issuance
of any class or series of Units pursuant to Section 4.4;
(g) an amendment made after the Series A Preference Unit
Preference Period, the effect of which is to separate into a
separate security (which may be evidenced by a certificate(s) if
determined by the General Partner to be appropriate), separate
and apart from the Series A Preference Units, the right of the
holders of Series A Preference Units then Outstanding to receive
any Series A Preference Unit Cumulative Deficiency;
(h) any amendment expressly permitted in this Agreement to be
made by the General Partner acting alone;
(i) an amendment effected, necessitated or contemplated by a
Merger Agreement approved in accordance with Section 16.3; or
(j) any other amendments substantially similar to the foregoing.
15.2 Amendment Procedures
Except as provided in Sections 15.1 and 15.3, all amendments
to this Agreement shall be made in accordance with the following
requirements. Amendments to this Agreement may be proposed
solely by the General Partner. Each such proposal shall contain
the text of the proposed amendment. If an amendment is proposed,
the General Partner shall seek the written approval of the
holders of the requisite percentage of Outstanding Voting Units
or call a meeting of such Limited Partners to consider and vote
on such proposed amendment. A proposed amendment shall be
effective upon its approval by the holders of at least 662/3% of
the Outstanding Voting Units, unless a greater or different
percentage is required under this Agreement, and an amendment
that would materially and adversely affect the rights and
preferences of any type, series or class of partnership interests
in relation to other types or classes of partnership interests
requires the approval of the holders of at least a majority of
the Outstanding Units of such type, series or class of
partnership interest (excluding those held by the General Partner
and its Affiliates). The General Partner shall notify all Record
Holders upon final adoption of any proposed amendment.
15.3 Amendment Requirement.
(a) Notwithstanding the provisions of Sections 15.1 and 15.2, no
provision of this Agreement that establishes a percentage of
Outstanding Voting Units or, if applicable, other voting
percentage required to take any action shall be amended, altered,
changed, repealed or rescinded in any respect that would have the
effect of reducing such voting requirement unless such amendment
is approved by the written consent or the affirmative vote of
Unitholders whose aggregate percentage of such Outstanding Voting
Units or, if applicable, other voting percentage constitutes not
less than the required percentage of such Outstanding Voting
Units or, if applicable, other voting percentage sought to be
reduced.
(b) Notwithstanding the provisions of Sections 15.1 and 15.2, no
amendment to this Agreement may (i) enlarge the obligations of
any Limited Partner without such Limited Partner's consent, which
may be given or withheld in its sole discretion, (ii) without the
consent of the General Partner, which may be given or withheld in
its sole discretion, (A) modify the amounts distributable to the
General Partner in respect of its general partner interest in the
Partnership or the Operating Companies or modify the amounts
reimbursable or otherwise payable to the General Partner or any
of its Affiliates by the Partnership or the Operating Companies,
(B) change Section 14.1(a) or (c), (C) restrict in any way any
action by or rights of the General Partner as set forth in this
Agreement, (D) change the term of the Partnership or, except as
set forth in Section 14.1(c), give any Person the right to
dissolve be Partnership or (E) otherwise enlarge the obligations
of the General Partner.
(c) Except as otherwise provided, and without limitation of the
General Partner's authority to adopt amendments to this Agreement
as contemplated in Section 15.1, the General Partner may amend
the Partnership Agreement without the approval of holders of
Outstanding Units, except that any amendment that would have a
material adverse effect on the rights or preferences of any class
of Outstanding Units in relation to other classes or series of
Units must be approved by the holders of at least a majority of
the Outstanding Units of the class or series affected (excluding
those held by the General Partner and its Affiliates).
(d) Notwithstanding any other provision of this Agreement,
except for amendments pursuant to Sections 6.2 or 15.1, no
amendments shall become effective without the approval of the
Record Holders of at least 95% of the Outstanding Voting Units
unless the Partnership obtains an Opinion of Counsel to the
effect that (a) such amendment will not cause the Partnership or
the Operating Companies to be taxable as a corporation or
otherwise taxed as an entity for federal income tax purposes and
(b) such amendment will not affect the limited liability of any
Limited Partner or any member of the Operating Companies under
applicable law.
(e) This Section 15.3 shall only be amended with the approval of
the Record Holders of not less than (i) 95% of the Outstanding
Voting Units and (ii) 95% of the Outstanding Series B Preference
Units voting as a class or series.
15.4 Meetings
All acts of Limited Partners to be taken hereunder shall be
taken in the manner provided in this Article XV. Meetings of the
Limited Partners may be called only by the General Partner or,
with respect to meetings called to remove the General Partner, by
Limited Partners owning 55% or more of the Outstanding Voting
Units. Limited Partners shall call a meeting to remove the
General Partner by delivering to the General Partner one or more
requests in writing stating that the signing Limited Partners
wish to call a meeting to remove the General Partner. Within 60
days after receipt of such a call from Limited Partners or within
such greater time as may be reasonably necessary for the
Partnership to comply with any statutes, rules, regulations,
listing agreements or similar requirements governing the holding
of a meeting or the solicitation of proxies for use at such a
meeting, the General Partner shall send a notice of the meeting
to the Limited Partners either directly or indirectly through the
Transfer Agent. A meeting shall be held at a time and place
determined by the General Partner on a date not more than 60 days
after the mailing of notice of the meeting. Limited Partners
shall not vote on matters that would cause the Limited Partners
to be deemed to be taking part in the management and control of
the business and affairs of the Partnership so as to jeopardize
the Limited Partners' limited liability under the Delaware Act or
the law of any other state in which the Partnership is qualified
to do business.
15.5 Notice of a Meeting
Notice of a meeting called pursuant to Section 15.4 shall be
given to the Record Holders of Voting Units in writing by mail or
other means of written communication in accordance with
Section 18.1. The notice shall be deemed to have been given at
the time when deposited in the mail or sent by other means of
written communication.
15.6 Record Date
For purposes of determining the Limited Partners entitled to
notice of or to vote at a meeting of the Limited Partners or to
give approvals without a meeting as provided in Section 15.11,
the General Partner may set a Record Date, which shall not be
less than 10 nor more than 60 days before (a) the date of the
meeting (unless such requirement conflicts with any rule,
regulation, guideline or requirement of any National Securities
Exchange on which the Units are listed for trading in which case
the rule, regulation, guideline or requirement of such exchange
shall govern) or (b) in the event that approvals are sought
without a meeting the date by which Limited Partners are
requested in writing by the General Partner to give such
approvals.
15.7 Adjournment
When a meeting is adjourned to another time or place, notice
need not be given of the adjourned meeting and a new Record Date
need not be fixed if the time and place thereof are announced at
the meeting at which the adjournment is taken, unless such
adjournment shall be for more than 45 days. At the adjourned
meeting, the Partnership may transact any business which might
have been transacted at the original meeting. If the adjournment
is for more than 45 days or if a new Record Date is fixed for the
adjourned meeting a notice of the adjourned meeting shall be
given in accordance with this Article XV.
15.8 Waiver of Notice; Approval of Meeting; Approval of Minutes
The transactions of any meeting of Limited Partners, however
called and noticed and whenever held shall be as valid as if had
at a meeting duly held after regular call and notice, if a quorum
is present either in person or by proxy, and if, either before or
after the meeting, each of the Limited Partners entitled to vote,
present in person or by proxy, signs a written waiver of notice
or an approval of the holding of the meeting or an approval of
the minutes thereof. All waivers and approvals shall be filed
with the Partnership records or made a part of the minutes of the
meeting. Attendance of a Limited Partner at a meeting shall
constitute a waiver of notice of the meeting, except when the
Limited Partner disapproves, at the beginning of the meeting, the
transaction of any business because the meeting is not lawfully
called or convened and except that attendance at a meeting is not
a waiver of any right to disapprove the consideration of matters
required to be included in the notice of the meeting but not so
included in either case if the disapproval is expressly made at
the meeting.
15.9 Quorum
The holders of two-thirds of the Outstanding Voting Units of
the class for which a meeting has been called represented in
person or by proxy shall constitute a quorum at a meeting of
Limited Partners of such class unless any such action by the
Limited Partners requires approval by holders of a majority in
interest of such Voting Units, in which case the quorum shall be
a majority (excluding, in each case, if such Voting Units are
excluded from such vote, Voting Units held by the General Partner
and its affiliates). At any meeting of the Limited Partners duly
called and held in accordance with this Agreement at which a
quorum is present, the act of Limited Partners holding
Outstanding Units that in the aggregate represent at least a
majority of the Outstanding Voting Units entitled to vote and be
present in person or by proxy at such meeting shall be deemed to
constitute the act of all Limited Partners, unless a greater or
different percentage is required with respect to such action
under the provisions of this Agreement, in which case the act of
the Limited Partners holding Outstanding Units that in the
aggregate represent at least such greater or different percentage
shall be required. The Limited Partners present at a duly called
or held meeting at which a quorum is present may continue to
transact business until adjournment, notwithstanding the
withdrawal of enough Limited Partners to leave less than a
quorum, if any action taken (other than adjournment) is approved
by the required percentage of Outstanding Voting Units specified
in this Agreement. In the absence of a quorum, any meeting of
Limited Partners may be adjourned from time to by the affirmative
vote of a majority of the Outstanding Voting Units represented
either in person or by proxy, but no other business may be
transacted except as provided in Section 15.7.
15.10 Conduct of Meeting
The General Partner shall have full power and authority
concerning the manner of conducting any meeting of the Limited
Partners or solicitation of approvals in writing, including,
without limitation, the determination of Persons entitled to
vote, the existence of a quorum, the satisfaction of the
requirements of Section 15.4, the conduct of voting, the validity
and effect of any proxies and the determination of any
controversies, votes or challenges arising in connection with or
during the meeting or voting. The General Partner shall
designate a Person to serve as chairman of any meeting and shall
further designate a Person to take the minutes of any meeting, in
either case including, without limitation, a Partner or a
director or officer of the General Partner. All minutes shall be
kept with the records of the Partnership maintained by the
General Partner. The General Partner may make such other
regulations consistent with applicable law and this Agreement as
it may deem advisable concerning the conduct of any meeting of
the Limited Partners or solicitation of approvals in writing,
including, without limitation, regulations in regard to the
appointment of proxies, the appointment and duties of inspectors
of votes and approvals, the submission and examination of proxies
and other evidence of the right to vote, and the revocation of
approvals in writing.
15.11 Action Without a Meeting
Any action that may be taken at a meeting of the Limited
Partners may be taken without a meeting if an approval in writing
setting forth the action so taken is signed by Limited Partners
holding not less than the minimum percentage of the Outstanding
Units that would be necessary to authorize to take such action at
a meeting at which all the Limited Partners were present and
voted. Prompt notice of the taking of action without a meeting
shall be given to the Limited Partners who have not approved in
writing. The General Partner may specify that any written ballot
submitted to Limited Partners for the purpose of taking any
action without a meeting shall be returned to the Partnership
within the time period, which shall be not less than 20 days,
specified by the General Partner. If a ballot returned to the
Partnership does not vote all of the Units held by the Limited
Partner, the Partnership shall be deemed to have failed to
receive a ballot for the Units that were not voted. If approval
of the taking of any action by the Limited Partners is solicited
by any Person other than by or on behalf of the General Partner,
the written approvals shall have no force and effect unless and
until (a) they are deposited with the Partnership in care of the
General Partner, (b) approvals sufficient to take the action
proposed are dated as of a date not more than 90 days prior to
the date sufficient approvals are deposited with the Partnership
and (c) an Opinion of Counsel is delivered to the General Partner
to the effect that the exercise of such right and the action
proposed to be taken with respect to any particular matter (i)
will not cause the Limited Partners to be deemed to be taking
part in the management and control of the business and affairs of
the Partnership so as to jeopardize the Limited Partners' limited
liability, (ii) will not jeopardize the status of the Partnership
as a partnership, or cause the Partnership to be taxable as a
corporation or otherwise taxed as an entity, under applicable tax
laws and regulations and (iii) is otherwise permissible under the
state statutes then governing the rights, duties and liabilities
of the Partnership and the Partners.
15.12 Voting and Other Rights.
(a) Only those Record Holders of Voting Units on the Record Date
set pursuant to Section 15.6 shall be entitled to notice of, and
to vote at, a meeting of Limited Partners or to act with respect
to matters as to which holders of the Outstanding Voting Units
have the right to vote or to act. All references in this
Agreement to votes of, or other acts that may be taken by, the
holders of Outstanding Voting Units shall be deemed to be
references to the votes or acts of the Record Holders of such
Outstanding Voting Units.
(b) With respect to Voting Units that are held for a Person's
account by another Person (such as a broker, dealer, bank trust
company or clearing corporation, or an agent of any of the
foregoing), in whose name such Voting Units are registered such
broker, dealer or other agent shall, in exercising the voting
rights in respect of such Voting Units on any matter, and unless
the arrangement by two such Persons provides otherwise, vote such
Voting Units in favor of, and at the direction of, the Person who
is the beneficial owner, and the Partnership shall be entitled to
assume it is so acting without further inquiry. The provisions
of this Section 15.12(b) (as well as all other provisions of this
Agreement) are subject to the provisions of Section 10.4.
(c) Except to the extent expressly provided in this Agreement or
as expressly required by the Delaware Act, Limited Partners
holding Series B Preference Units do not have the right to vote
in respect of such Units, either with other holders of Units or
as a class or series, with respect to any matter.
ARTICLE XVI
Merger
16.1 Authority
The Partnership may merge or consolidate with one or more
corporations, business trusts or associations, real estate
investment trusts, common law trusts or unincorporated
businesses, including, without limitation, a general partnership
or limited partnership, formed under the laws of the State of
Delaware or any other state of the United States of America
pursuant to a written agreement of merger or consolidation
("Merger Agreement") in accordance with this Article.
16.2 Procedure for Merger or Consolidation
Merger or consolidation of the Partnership pursuant to this
Article XVI requires the prior approval of the General Partner.
If the General Partner shall determine, in the exercise of its
sole discretion, to consent to the merger or consolidation, the
General Partner shall approve the Merger Agreement, which shall
set forth:
(a) the names and jurisdictions of formation or organization of
each of the business entities proposing to merge or consolidate;
(b) the name and jurisdictions of formation or organization of
the business entity that is to survive the proposed merger or
consolidation (hereafter designated as the "Surviving Business
Entity");
(c) the terms and conditions of the proposed merger or
consolidation;
(d) the manner and basis of exchanging or converting the equity
securities of each constituent business entity for, or into,
cash, property or general or limited partnership interests,
rights, securities or obligations of the Surviving Business
Entity and (i) if any general or limited partnership interests,
securities or rights of any constituent business entity are not
to be exchanged or converted solely for, or into, cash, property
or general or limited partnership interests, rights, securities
or obligations of the Surviving Business Entity, the cash,
property or general or limited partnership interests, rights,
securities or obligations of any limited partnership,
corporation, trust or other entity (other than the Surviving
Business Entity) which the holders of such general or limited
partnership interest are to receive in exchange for, or upon
conversion of their securities or rights, and (ii) in the case of
securities represented by certificates, upon the surrender of
such certificates, which cash, property or general or limited
partnership interests, rights, securities or obligations of the
Surviving Business Entity or any limited partnership,
corporation, trust or other entity (other than the Surviving
Business Entity), or evidences thereof, are to be delivered;
(e) a statement of any amendments or other changes in the
constituent documents (the articles or certificate of
incorporation, articles of trust, declaration of trust,
certificate or agreement of limited partnership or other similar
charter or governing document), or the adoption of new
constituent documents, in either case as contemplated in 17-
211(g) of the Delaware Act, of the Surviving Business Entity to
be effected by such merger or consolidation;
(f) the effective time of the merger, which may be the date of
the filing of the certificate of merger pursuant to Section 16.4
or a later date specified in or determinable in accordance with
the Merger Agreement; provided that if the effective time of the
merger is to be later than the date of the filing of the
certificate of merger, it shall be fixed no later than the time
of the filing of the certificate of merger and stated therein;
and
(g) such other provisions with respect to the proposed merger or
consolidation as are deemed necessary or appropriate by the
General Partner.
16.3 Approval by Limited Partner of Merger or Consolidation.
(a) The General Partner of the Partnership, upon its approval of
the Merger Agreement, shall direct that the Merger Agreement be
submitted to a vote of Limited Partners holding Outstanding
Voting Units as of the relevant Record Date whether at a meeting
or by written consent, in either case in accordance with the
requirements of Article XV. A copy or a summary of the Merger
Agreement shall be included in or enclosed with the notice of a
meeting or the written consent.
(b) The Merger Agreement shall be approved upon receiving the
affirmative vote or consent of the holders of at least a majority
of the Outstanding Voting Units, unless the Merger Agreement
contains any provision as to which, if contained in an amendment
to this Agreement, the provisions of this Agreement or the
Delaware Act would require the vote or consent of a greater
percentage of the Outstanding Voting Units or of any class of
Units (voting separately as a class), in which case the vote or
consent of such greater percentage or of such class of Units
shall be required for approval of the Merger Agreement.
(c) After such approval by vote or consent of the Limited
Partners, and at any time prior to the filing of the certificate
of merger pursuant to Section 16.4, the merger or consolidation
may be abandoned pursuant to provisions therefor, if any, set
forth in the Merger Agreement.
16.4 Certificate of Merger
Upon the required approval by the General Partner and Limited
Partners of a Merger Agreement, a certificate of merger shall be
executed and filed with the Secretary of State of the State of
Delaware in conformity with the requirements of the Delaware Act.
16.5 Effect of Merger.
(a) Upon the effective date of the certificate of merger:
(i) all of the rights, privileges and powers of each of the
business entities that has merged or consolidated and all
property, real, personal and mixed and all debts due to any of
those business entities and all other things and causes of action
belonging to each of these business entities shall be vested in
the Surviving Business Entity and after the merger or
consolidation, shall be the property of the Surviving Business
Entity to the extent they were part of each constituent business
entity;
(ii) the title to any real property vested by deed or otherwise
in any of those constituent business entities shall not revert
and shall not be in any way impaired because of the merger or
consolidation;
(iii) all rights of creditors and all liens on or security
interest in property of any of those constituent business
entities shall be preserved unimpaired; and
(iv) all debts, liabilities and duties of those constituent
business entities shall attach to the Surviving Business Entity,
and may be enforced against it to the same extent as if the
debts, liabilities and duties had been incurred or contracted by
it.
(b) A merger or consolidation effected pursuant to this Article
XVI shall not be deemed to result in a transfer or assignment of
assets or liabilities from one entity to another having occurred.
ARTICLE XVII
Right to Acquire Units
17.1 Right to Redeem Preference Units.
(a) Notwithstanding anything to the contrary in this Agreement,
the Partnership may at any time after the second anniversary of
the Conversion Date, in the sole discretion of the General
Partner, redeem any or all of the Series A Preference Units then
issued and Outstanding for an amount equal to the Unrecovered
Capital of such Series A Preference Units plus accrued
arrearages, if any, as of the date the General Partner mails the
notice described in Section 17.3 of the Partnership's election to
redeem such Series A Preference Units. If after giving effect to
an anticipated redemption, however, fewer than 1,000,000 Series A
Preference Units would be held by Persons other than the General
Partner and its Affiliates, the Partnership shall redeem all of
such Series A Preference Units if it redeems any Series A
Preference Units.
(b) Notwithstanding anything to the contrary in this Agreement,
the Partnership may at any time after the Series B Preference
Unit Issuance Date, in the sole discretion of the General
Partner, redeem any or all of the Series B Preference Units for
(i) an amount per Series B Preference Unit equal to the Series B
Preference Unit Liquidation Value as of the Redemption Date or
(ii) a number of Series A Common Units per Series B Preference
Unit such that the Current Market Price (as of the third business
day immediately preceding the date on which the General Partner
mails the notice described in Section 17.3 of the Partnership's
election to redeem such Series B Preference Units) of the Series
A Common Units issued in respect of each redeemed Series B
Preference Unit is equal to the Series B Preference Unit
Liquidation Value as of the Redemption Date.
(c) With respect to any Series A Common Units issued in
redemption or replacement of, or in exchange for, any Series B
Preference Units pursuant to Section 17.1(b), the holders of more
than 50% of the Outstanding Series A Common Units so issued shall
have Demand Registration rights with respect to such Series A
Common Units equivalent to such rights granted to the General
Partner and its Affiliates under Section 6.14, and Piggyback
Registration rights with respect to such Series A Common Units
equivalent to such rights granted to the General Partner and its
Affiliates under Section 6.14, in each such case until the later
to occur of (i) the expiration of the two-year period established
by Section 6.14(d) or (ii) two years from such redemption,
replacement or exchange date. To the extent that holders of
Series A Common Units so issued desire to exercise any rights
held by them under this Section 17.1(c), such exercise must be by
the holders of more than 50% of the Outstanding Series A Common
Units so issued.
17.2 Right to Acquire Units
Notwithstanding any provision of this Agreement if at any time
less than 15% of the total Units of any class then issued and
Outstanding are held by Persons other than the General Partner
and its Affiliates, the General Partner shall then have the right
(which right it may assign and transfer to the Partnership or any
Affiliate of the General Partner) exercisable in its sole
discretion, to purchase all, but not less than all, of the Units
of such class then Outstanding held by Persons other than the
General Partner and its Affiliates, at the higher of (a) the
highest cash price paid by the General Partner or any of its
Affiliates for any Unit of such class purchased during the 90-day
period preceding the date that the notice described in
Section 17.3(b) is mailed or (b) the Current Market Price as of
the date five days prior to the date the General Partner (or any
of its assignees) mails the Notice of Election to Purchase with
respect to its election to purchase such Units. As used in this
Agreement, (i) "Current Market Price" of a Unit listed or
admitted to trading on any National Securities Exchange means the
average of the daily Closing Prices per Unit of such class for
the 20 consecutive Trading Days immediately prior to, but not
including such date; (ii) "Closing Price" for any day means the
last sale price on such day, regular way, or in case no such sale
takes place on such day, the average of the closing bid and asked
prices on such day, regular way, in either case as reported in
the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Units of a class are not listed or
admitted to trading on the New York Stock Exchange as reported in
the principal consolidated transaction reporting system with
respect to securities listed on the principal National Securities
Exchange on which the Units of such class are listed or admitted
to trading or, if the Units of a class are not listed or admitted
to trading on any National Securities Exchange, the last quoted
price on such day or, if not so quoted the average of the high
bid and low asked prices on such day in the over-the-counter
market, as reported by the Nasdaq National Market or such other
system then in use, or if on any such day the Units of a class
are not quoted by any such organization, the average of the
closing bid and asked price on such day as furnished by a
professional market maker making a market in the Units of such
class selected by the Board of Directors of the General Partner,
or if on any such day no market maker is making a market in the
Units of such class, the fair value of such Units on such day as
determined reasonably and in good faith by the Board of Directors
of the General Partner, and (iii) "Trading Day" means a day on
which the principal National Securities Exchange on which the
Units of any class are listed or admitted to trading is open for
the transaction of business or, if Units of a class are not
listed or admitted to trading on any National Securities
Exchange, a day on which banking institutions in New York City
generally are open.
17.3 Notice of Election to Redeem or Acquire Units.
(a) If the Partnership elects to exercise the right to redeem
Series A Preference Units granted pursuant to Section 17.1(a), or
the right to redeem Series B Preference Units granted pursuant to
Section 17.1(b), the General Partner shall deliver to the
Transfer Agent written notice of such election to redeem (the
"Notice of Election to Redeem") and shall cause the Transfer
Agent to mail a copy of such Notice of Election to Redeem to the
Record Holders of such Preference Units (as of a Record Date
selected by the General Partner) at least 30, but not more than
60 days prior to the Redemption Date. Such Notice of Election to
Redeem also shall be published in daily newspapers of general
circulation printed in the English language and published in the
Borough of Manhattan, New York. The Notice of Election to Redeem
shall specify the date upon which such Preference Units shall be
redeemed (the "Redemption Date") and the price (determined in
accordance with Section 17.1) at which such Preference Units will
be redeemed, and shall state that the Partnership elects to
redeem such Preference Units, upon surrender of Unit Certificates
representing such Preference Units (or, in the case of Series B
Preference Units, such other representation of such Units as the
General Partner shall require) in exchange for payment, at such
office or offices of the Transfer Agent as the Transfer Agent may
specify, or as may be required by any National Securities
Exchange on which such Preference Units are listed or admitted to
trading. Any such Notice of Election to Redeem mailed to a
Record Holder of Preference Units at his address as reflected in
the records of the Transfer Agent shall be conclusively presumed
to have been given whether or not the owner receives such notice.
On or prior to the Redemption Date, the General Partner shall
deposit with the Transfer Agent cash in an amount sufficient to
pay the aggregate redemption price of all of the Preference Units
to be redeemed in accordance with this Article XVII. If the
Notice of Election to Redeem shall have been duly given as
aforesaid at least 30, but not more than 60 days prior to the
Redemption Date, and if on or prior to the Redemption Date the
deposit described in the preceding sentence has been made for the
benefit of the holders of Preference Units subject to redemption
as provided herein, then from and after the Redemption Date,
notwithstanding that any Unit Certificate shall not have been
surrendered for redemption, all rights of the holders of such
Preference Units (including, without limitation, any rights
pursuant to Articles IV, V and XIV) shall thereupon cease, except
the right to receive the redemption price (determined in
accordance with Section 17.1) for the Preference Units therefor,
without interest, upon surrender to the Transfer Agent of the
Unit Certificates representing such Preference Units, and such
Preference Units shall be deemed to be no longer Outstanding and
each holder of such Preference Units will cease to be a Partner
with respect to such Preference Units as of the Redemption Date.
(b) If the General Partner, any Affiliate of the General
Partner or the Partnership elects to exercise the right to
purchase Units granted pursuant to Section 17.2, the General
Partner shall deliver to the Transfer Agent written notice of
such election to purchase (the "Notice of Election to Purchase")
and shall cause the Transfer Agent to mail a copy of such Notice
of Election to Purchase to the Record Holders of Units (as of a
Record Date selected by the General Partner) at least 30, but not
more than 60 days prior to the Purchase Date. Such Notice of
Election to Purchase shall also be published in daily newspapers
of general circulation printed in the English language and
published in the Borough of Manhattan, New York. The Notice of
Election to Purchase shall specify the Purchase Date and the
price (determined in accordance with Section 17.2) at which Units
will be purchased and state that the General Partner, its
Affiliate or the Partnership, as the case may be, elects to
purchase such Units, upon surrender of Unit Certificates
representing such Units in exchange for payment at such office or
offices of the Transfer Agent as the Transfer Agent may specify,
or as may be required by any National Securities Exchange on
which the Units are listed or admitted to trading. Any such
Notice of Election to Purchase mailed to a Record Holder of Units
at his address as reflected in the records of the Transfer Agent
shall be conclusively presumed to have been given whether or not
the owner receives such notice. On or prior to the Purchase
Date, the General Partner, its Affiliate or the Partnership, as
the case may be, shall deposit with the Transfer Agent cash in an
amount sufficient to pay the aggregate purchase price of all of
the Units to be purchased in accordance with Article XVII. If
the Notice of Election to Purchase shall have been duly given as
aforesaid at least 30 days but not more than 60 days prior to the
Purchase Date, and if on or prior to the Purchase Date the
deposit described in the preceding sentence has been made for the
benefit of the holders of Units subject to purchase as provided
herein, then from and after the Purchase Date, notwithstanding
that any Unit Certificate shall not have been surrendered for
purchase, all rights of the holders of such Units (including,
without limitation, any rights pursuant to Articles IV, V and
XIV) shall thereupon cease, except the right to receive the
purchase price (determined in accordance with Section 17.2) for
the Units therefor, without interest, upon surrender to the
Transfer Agent of the Unit Certificates representing such Units,
and such Units shall thereupon be deemed to be transferred to the
General Partner, its Affiliate or the Partnership, as the case
may be, on the record books of the Transfer Agent and the
Partnership, and the General Partner or any Affiliate of the
General Partner, or the Partnership, as the case may be, shall be
deemed to be the owner of all such Units from and after the
Purchase Date and shall have all rights as the owner of such
Units (including, without limitation, all rights as owner
pursuant to Articles IV, V and XIV).
17.4 Surrender of Unit Certificates
At any time from and after the Redemption Date or the Purchase
Date, as the case may be, a holder of an Outstanding Unit subject
to redemption or purchase as provided in this Article XVII may
surrender his Unit Certificate, evidencing such Unit to the
Transfer Agent in exchange for payment of the amount described in
Section 17.1 or 17.2, as the case may be, therefor without
interest thereon.
ARTICLE XVIII
General Provisions
18.1 Addresses and Notices
Any notice, demand, request or report required or permitted to
be given or made to a Partner or Assignee 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 Partner or
Assignee at the address described below. Any notice, payment or
report to be given or made to a Partner or Assignee 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 Record Holder of
such Unit at his address as shown on the records of the Transfer
Agent or as otherwise shown on the records of the Partnership,
regardless of any claim of any Person who may have an interest in
such Unit or the Partnership Interest of a General Partner by
reason of any assignment or otherwise. An affidavit or
certificate of asking of any notice, payment or report in
accordance with the provisions of this Section 18.1 executed by
the General Partner, the Transfer Agent or the mailing
organization shall be prima facie evidence of the giving or
mailing of such notice, payment or report. If any notice,
payment or report addressed to a Record Holder at the address of
such Record Holder appearing on the books and records of the
Transfer Agent or the Partnership is returned by the United
States Post Office marked to indicate that the United States
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 Record Holder or another Person notifies
the Transfer Agent or the Partnership of a change in his address)
if they are available for the Partner or Assignee 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 Partners and Assignees. Any notice to the
Partnership shall be deemed given if received by the General
Partner at the principal office of the Partnership designated
pursuant to Section 1.3. The General Partner may rely and shall
be protected in relying on any notice or other document from a
Partner, Assignee or other Person if believed by it to be
genuine.
18.2 Titles and Captions
All article or section titles or captions in this Agreement
are for convenience only. They shall not be deemed part of this
Agreement and in no way define, limit extend or describe the
scope or intent of any provisions hereof. Except as specifically
provided otherwise, references to "Articles" and "Sections" are
to Articles and Sections of this Agreement.
18.3 Pronouns and Plurals
Whenever the context may require, 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.
18.4 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.
18.5 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.
18.6 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.
18.7 Creditors
None of the provisions of this Agreement shall be for the
benefit of, or shall be enforceable by, any creditor of the
Partnership.
18.8 Waiver
No failure by any party to insist upon the strict performance
of any covenant duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof
shall constitute a waiver of any such breach or any other
covenant duty, agreement or condition.
18.9 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 or, in the case of a Person acquiring a Unit, upon
executing and delivering a Transfer Application as herein
described, independently of the signature of any other party.
18.10 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.
18.11 Invalidity of Provisions
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.
[The remainder of this page is intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
GENERAL PARTNER:
EL PASO ENERGY PARTNERS COMPANY
By: /s/ David L. Siddall
------------------------
David L. Siddall
Vice President
LIMITED PARTNERS:
All Limited partners now and
hereafter admitted as limited
partners of the Partnership,
pursuant to Powers of Attorney now
and hereafter executed in favor of,
and granted and delivered to, the
General Partner.
By: El Paso Energy Partners
Company, General Partners, as
attorney-in-fact for all
Limited Partners pursuant to
the Powers of Attorney granted
pursuant to Section 1.4.
By: /s/ David L. Siddall
__________________________
David L. Siddall
Vice President
EXHIBIT A-1
to the Second Amended and Restated Agreement of
Limited Partnership of
El Paso Energy Partners, L.P.
Certificate Evidencing Series A Preference Units
Representing Limited Partner Interests
EL PASO ENERGY PARTNERS, L.P.
(A limited partnership formed under the laws of Delaware)
No.__________ _____________ Series A Preference Units
CUSIP 28368B 20 1
EL PASO ENERGY PARTNERS COMPANY, a Delaware corporation, as
the General Partner of EL PASO ENERGY PARTNERS, L.P., a Delaware
limited partnership (the "Partnership"), hereby certifies that
____________ (the "Holder") is the registered owner of _______
Series A Preference Units (formerly referred to only as
Preference Units) representing limited partner interests in the
Partnership (the "Series A Preference Units") transferable on the
books of the Partnership, in person or by duly authorized
attorney, upon surrender of this Certificate properly endorsed
and accompanied by a properly executed application for transfer
of the Preference Units represented by this Certificate. The
rights, preferences and limitations of the Series A Preference
Units are set forth in, and this Certificate and the Series A
Preference Units represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Second
Amended and Restated Agreement of Limited Partnership of El Paso
Energy Partners, L.P., as amended, supplemented or restated from
time to time (the "Partnership Agreement"). Copies of the
Partnership Agreement are on file at, and will be furnished
without charge on delivery of written request to the Partnership
at the principal office of the Partnership located at the El Paso
Building, 1001 Louisiana, Houston, Texas 77002. Capitalized
terms used herein but not defined shall have the meanings given
them in the Partnership Agreement.
The Holder, by accepting this Certificate, is deemed to have
(a) requested admission as, and agreed to become, a Limited
Partner or a Substituted Limited Partner, as applicable, and to
have agreed to comply with and be bound by and to have executed
the Partnership Agreement, (b) represented and warranted that the
Holder has all right, power and authority and, if an individual,
the capacity necessary to enter into the Partnership Agreement,
(c) appointed the General Partner and, if a Liquidator shall be
appointed, the Liquidator of the Partnership as the Holder's
attorney to execute, swear to, acknowledge and file any document,
including, without limitation, the Partnership Agreement and any
amendment thereto and the Certificate of Limited Partnership of
the Partnership and any amendment thereto, necessary or
appropriate for the Holder's admission as a Limited Partner or a
Substituted Limited Partner, as applicable, in the Partnership
and as a party to the Partnership Agreement, (d) given the powers
of attorney provided for in the Partnership Agreement, (e) made
the waivers and given the consents and approvals contained in the
Partnership Agreement and (f) certified to the Partnership that
the Holder (including, to the best of the Holder's knowledge, any
person for whom the Holder holds the Preference Units) is an
Eligible Citizen.
This Certificate shall not be valid for any purpose unless
it has been countersigned and registered by the Transfer Agent
and Registrar.
EL PASO ENERGY PARTNERS COMPANY, Dated:
as General Partner
By: /s/ James H. Lytal Countersigned and Registered
by: James H. Lytal
President
CHASEMELLON SHAREHOLDER
SERVICES
By: /s/ David L. Siddall as Transfer Agent and
David L. Siddall Registrar
Secretary
By:__________________________
Authorized Signature
[Reverse of Certificate]
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this Certificate, shall be construed as follows
according to applicable laws or regulations:
TEN COM - as tenants in UNIF GIFT MIN ACT -Custodian
common (Cust) (Minor)
TEN ENT - as tenants by the under Uniform Gifts
entireties to Minors Act
JT TEN - as joint tenants (State)
with right of
survivorship and
not as tenants in
common
Additional abbreviations, though not in the above list, may
also be used.
ASSIGNMENT OF PREFERENCE UNITS
in
EL PASO ENERGY PARTNERS, L.P.
IMPORTANT NOTICE REGARDING INVESTOR RESPONSIBILITIES
DUE TO TAX SHELTER STATUS OF EL PASO ENERGY PARTNERS, LP.
You have acquired an interest in El Paso Energy Partners,
L.P., the El Paso Building, 1001 Louisiana, Houston, Texas 77002,
whose taxpayer identification number is 76-0385475. The Internal
Revenue Service has issued El Paso Energy Partners, L.P. the
following tax shelter registration number: __________________.
If there is no number in the blank in the preceding sentence, the
number will be furnished to the Holder when it is received.
YOU MUST REPORT THIS REGISTRATION NUMBER TO THE INTERNAL
REVENUE SERVICE IF YOU CLAIM ANY DEDUCTION, LOSS, CREDIT, OR
OTHER TAX BENEFIT OR REPORT ANY INCOME BY REASON OF YOUR
INVESTMENT IN EL PASO ENERGY PARTNERS, L.P.
You must report the registration number as well as the name
and taxpayer identification number of El Paso Energy Partners,
L.P. on Internal Revenue Code Form 8271. FORM 8271 MUST BE
ATTACHED TO THE RETURN ON WHICH YOU CLAIM THE DEDUCTION, LOSS,
CREDIT, OR OTHER TAX BENEFIT OR REPORT ANY INCOME BY REASON OF
YOUR INVESTMENT IN EL PASO ENERGY PARTNERS, L.P.
If you transfer your interest in El Paso Energy Partners,
L.P. to another person, you are required by the Internal Revenue
Service to keep a list containing (a) that person's name, address
and taxpayer identification number, (b) the date on which you
transferred the interest and (c) the name, address and tax
shelter registration number of El Paso Energy Partners, LP. If
you do not want to keep such a list, you must (1) send the
information specified above to the General Partner, who will keep
the list for this tax shelter and (2) give a copy of this notice
to the person to whom you transfer your interest Your failure to
comply with any of the above-described responsibilities could
result in the imposition of a penalty under Section 6707(b) or
6708(a) of the Internal Revenue Service Code of 1986, as amended,
unless such failure is shown to be due to reasonable cause.
ISSUANCE OF A REGISTRATION NUMBER DOES NOT INDICATE THAT
THIS INVESTMENT OR THE CLAIMED TAX BENEFITS HAVE BEEN REVIEWED,
EXAMINED, OR APPROVED BY THE INTERNAL REVENUE SERVICE.
FOR VALUE RECEIVED, __________ hereby assigns, conveys,
sells and transfers unto
_________________________________________________________________
(Please print or typewrite name and address of Assignee)
___________________________ _________________________
(Please insert Social Security or
other identifying number of
Assignee)
______________ Preference Units representing limited partner
interests evidenced by this Certificate, subject to the
Partnership Agreement, and does hereby irrevocably constitute and
appoint ___________________ as its attorney-in-fact with full
power of substitution to transfer the same on the books of El
Paso Energy Partners, L.P.
Date: NOTE: The signature to any endorsement hereon must
correspond with the name as written upon the face of
this Certificate in every particular, without
alteration, enlargement or change.
THE SIGNATURE(S) SHOULD BE
GUARANTEED BY AN "ELIGIBLE
GUARANTOR INSTITUTION" AS
DEFINED IN RULE 17AD-15 UNDER
THE SECURITIES & EXCHANGE ACT OF
1934, AS AMENDED
(Signature)
SIGNATURE(S) GUARANTEED:
(Signature)
No assignment or transfer of the Preference Units evidenced
hereby will be registered on the books of El Paso Energy
Partners, L.P. unless the Certificate evidencing the Preference
Units to be transferred is surrendered for registration or
transfer and an Application for Transfer of Preference Units (a
"Transfer Application") has been executed by a transferee either
(a) on the form set forth below or (b) on a separate application
that the Partnership will furnish on request without charge. A
transferor of the Preference Units shall have no duty to the
transferee with respect to execution of the Transfer Application
in order for such transferee to obtain registration of the
transfer of the Preference Units.
_________________________________________
APPLICATION FOR TRANSFER OF PREFERENCE UNITS
The undersigned ("Applicant") hereby applies for transfer to
the name of the Applicant of the Preference Units evidenced
hereby.
The Applicant (a) requests admission as a Substituted
Limited Partner and agrees to comply with and be bound by, and
hereby executes, the Second Amended and Restated Agreement of
Limited Partnership of El Paso Energy Partners, L.P., (the
"Partnership") as amended, supplemented or restated to the date
hereof (the "Partnership Agreement"), (b) represents and warrants
that the Applicant has all right, power and authority and, if an
individual, the capacity necessary to enter into the Partnership
Agreement, (c) appoints the General Partner and, if a Liquidator
shall be appointed, the Liquidator of the Partnership as the
Applicant's attorney to execute, swear to, acknowledge and file
any document, including, without limitation, the Partnership
Agreement and any amendment thereto and the Certificate of
Limited Partnership of the Partnership and any amendment thereto,
necessary or appropriate for the Applicant's admission as a
Substituted Limited Partner and as a party to the Partnership
Agreement, (d) gives the powers of attorney provided for in the
Partnership Agreement, (e) makes the waivers and gives the
consents and approvals contained in the Partnership Agreement and
(f) certifies to the Partnership that the Applicant (including,
to the best of the Applicant's knowledge, any person for whom the
Applicant will hold the Preference Units) is an Eligible Citizen.
Capitalized terms not defined herein have the meanings assigned
to such terms in the Partnership Agreement.
Date:
Signature of Applicant
_________________________________________________________________
Name and Address of Applicant
_________________________________
Social Security or other identifying
Purchase Price including commissions, if any
number of Applicant
Type of Entity (check one)
[] Individual [] Partnership [] Corporation []
Trust ? Other (specify)
Nationality (check one)
[] United States Citizen, Resident or Domestic Entity [] Non-
resident Alien [] Foreign Corporation
If the United States Citizen, Resident or Domestic Entity
box is checked, the following certification must be completed.
Under Section 1445(c) of the Internal Revenue Code of 1986,
as amended (the "Code"), the Partnership must withhold tax with
respect to certain transfers of property if a holder of an
interest in the Partnership is a foreign person. To inform the
Partnership that no withholding is required with respect to the
undersigned interest-holders interest in it, the undersigned
hereby certifies the following (or, if applicable, certifies the
following on behalf of the interest-holder):
Complete either A or B:
A. Individual Interest-Holder
1.I am not a non-resident alien for purposes of United
States income taxation.
2.My United States taxpayer identifying number (Social
Security Number) is .
3.My home address is .
4.My year end for tax reporting purposes is .
B. Partnership, Corporate or Other Interest-Holder
1.
(Name of Interest-Holder)
is not a foreign corporation, foreign partnership,
foreign trust or foreign estate (as those terms are
defined in the Code and Treasury Regulations).
2.The interest-holder's U.S. employer identification
number is .
3.The interest-holder's office address and place of
incorporation (if applicable) is
.
4.The interest-holder's year end for tax reporting
purposes is .
The interest-holder agrees to notify the Partnership within
sixty (60) days of the date the interest-holder becomes a foreign
person.
The interest-holder understands that this Certificate may be
disclosed to the Internal Revenue Service by the Partnership and
that any false statement contained herein could be punishable by
fine, imprisonment or both.
Under penalties of perjury, I declare that I have examined
this certification and to the best of my knowledge and belief it
is true, correct and complete and, if applicable, I further
declare that I have authority to sign this document on behalf of
_________________________________________________________________
Name of Interest-Holder
_________________________________________________________________
Signature and Date
_________________________________________________________________
Title (if applicable)
NOTE: If the Applicant is a broker, dealer, bank, trust
company, clearing corporation, other nominee holder or an agent
of any of the foregoing, and is holding the Preference Units for
the account of any other person, this application should be
completed by an officer thereof or, in the case of a broker or
dealer, by a registered representative who is a member of a
registered national securities exchange or a member of the
National Association of Securities Dealers, Inc., or, in the case
of any other nominee holder, a person performing a similar
function. If the Applicant is a broker, dealer, bank, trust
company, clearing corporation, other nominee owner or an agent of
any of the foregoing, the above certification as to any Person
for whom the Applicant will hold the Preference Units shall be
made to the best of the Applicant's knowledge.
EXHIBIT A-2
to the Second Amended and Restated Agreement of
Limited Partnership of
El Paso Energy Partners, L.P.
Certificate Evidencing Common Units
Representing Limited Partner Interests
EL PASO ENERGY PARTNERS, L.P.
(A limited partnership formed under the laws of Delaware)
No.__________ __________ Common Units
CUSIP 28368B 10 2
EL PASO ENERGY PARTNERS COMPANY, a Delaware corporation, as
the General Partner of EL PASO ENERGY PARTNERS, L.P., a Delaware
Limited partnership (the "Partnership"), hereby certifies that
____________ (the "Holder") is the registered owner of _______
Common Units (referred to in the Partnership Agreement as "Series
A Common Units") representing limited partner interests in the
Partnership (the "Common Units") transferable on the books of the
Partnership, in person or by duly authorized attorney, upon
surrender of this Certificate properly endorsed and accompanied
by a properly executed application for transfer of the Common
Units represented by this Certificate. The rights, preferences
and limitations of the Common Units are set forth in, and this
Certificate and the Common Units represented hereby are issued
and shall in all respects be subject to the terms and provisions
of, the Second Amended and Restated Agreement of Limited
Partnership of El Paso Energy Partners, L.P., as amended,
supplemented or restated from time to time (the "Partnership
Agreement"). Copies of the Partnership Agreement are on file at,
and will be furnished without charge on delivery of written
request to the Partnership at the principal office of the
Partnership located at the El Paso Building, 1001 Louisiana,
Houston, Texas 77002. Capitalized terms used herein but not
defined shall have the meanings given them in the Partnership
Agreement.
The Holder, by accepting this Certificate, is deemed to have
(a) requested admission as, and agreed to become, a Limited
Partner or a Substituted Limited Partner, as applicable, and to
have agreed to comply with and be bound by and to have executed
the Partnership Agreement, (b) represented and warranted that the
Holder has all right, power and authority and, if an individual,
the capacity necessary to enter into the Partnership Agreement,
(c) appointed the General Partner and, if a Liquidator shall be
appointed, the Liquidator of the Partnership as the Holder's
attorney to execute, swear to, acknowledge and file any document,
including, without limitation, the Partnership Agreement and any
amendment thereto and the Certificate of Limited Partnership of
the Partnership and any amendment thereto, necessary or
appropriate for the Holder's admission as a Limited Partner or a
Substituted Limited Partner, as applicable, in the Partnership
and as a party to the Partnership Agreement, (d) given the powers
of attorney provided for in the Partnership Agreement, (e) made
the waivers and given the consents and approvals contained in the
Partnership Agreement and (f) certified to the Partnership that
the Holder (including, to the best of the Holder's knowledge, any
person for whom the Holder holds the Common Units) is an Eligible
Citizen.
This Certificate shall not be valid for any purpose unless
it has been countersigned and registered by the Transfer Agent
and Registrar.
EL PASO ENERGY PARTNERS COMPANY, Dated:
as General Partner
By: /s/ James H. Lytal Countersigned and Registered
by: James H. Lytal
President
CHASE MELLON SHAREHOLDER
SERVICES
By: /s/ David L. Siddall as Transfer Agent and
David L. Siddall Registrar
Secretary
By:______________________
Authorized Signature
[Reverse of Certificate]
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this Certificate, shall be construed as follows
according to applicable laws or regulations:
TEN COM - as tenants in UNIF GIFT MIN ACT - Custodian
common
TEN ENT - as tenants by the (Cust) (Minor)
entireties
JT TEN - as joint tenants Under Uniform Gifts
with right of to Minors Act
survivorship and
not as tenants in (State)
common
Additional abbreviations, though not in the above list, may
also be used.
ASSIGNMENT OF COMMON UNITS
in
EL PASO ENERGY PARTNERS, L.P.
IMPORTANT NOTICE REGARDING INVESTOR RESPONSIBILITIES
DUE TO TAX SHELTER STATUS OF EL PASO ENERGY PARTNERS, LP.
You have acquired an interest in El Paso Energy Partners,
L.P., the El Paso Building, 1001 Louisiana, Houston, Texas 77002,
whose taxpayer identification number is 76-0385475. The Internal
Revenue Service has issued El Paso Energy Partners, L.P. the
following tax shelter registration number: __________________.
If there is no number in the blank in the preceding sentence, the
number will be furnished to the Holder when it is received.
YOU MUST REPORT THIS REGISTRATION NUMBER TO THE INTERNAL
REVENUE SERVICE IF YOU CLAIM ANY DEDUCTION, LOSS, CREDIT, OR
OTHER TAX BENEFIT OR REPORT ANY INCOME BY REASON OF YOUR
INVESTMENT IN EL PASO ENERGY PARTNERS, L.P.
You must report the registration number as well as the name
and taxpayer identification number of El Paso Energy Partners,
L.P. on Internal Revenue Code Form 8271. FORM 8271 MUST BE
ATTACHED TO THE RETURN ON WHICH YOU CLAIM THE DEDUCTION, LOSS,
CREDIT, OR OTHER TAX BENEFIT OR REPORT ANY INCOME BY REASON OF
YOUR INVESTMENT IN EL PASO ENERGY PARTNERS, L.P.
If you transfer your interest in El Paso Energy Partners,
L.P. to another person, you are required by the Internal Revenue
Service to keep a list containing (a) that person's name, address
and taxpayer identification number, (b) the date on which you
transferred the interest and (c) the name, address and tax
shelter registration number of El Paso Energy Partners, LP. If
you do not want to keep such a list, you must (1) send the
information specified above to the General Partner, who will keep
the list for this tax shelter and (2) give a copy of this notice
to the person to whom you transfer your interest Your failure to
comply with any of the above-described responsibilities could
result in the imposition of a penalty under Section 6707(b) or
6708(a) of the Internal Revenue Service Code of 1986, as amended,
unless such failure is shown to be due to reasonable cause.
ISSUANCE OF A REGISTRATION NUMBER DOES NOT INDICATE THAT
THIS INVESTMENT OR THE CLAIMED TAX BENEFITS HAVE BEEN REVIEWED,
EXAMINED, OR APPROVED BY THE INTERNAL REVENUE SERVICE.
FOR VALUE RECEIVED, __________ hereby assigns, conveys,
sells and transfers unto
(Please print or typewrite name and address of Assignee)
(Please insert Social Security or
other identifying number of
Assignee)
______________ Common Units representing limited partner
interests evidenced by this Certificate, subject to the
Partnership Agreement, and does hereby irrevocably constitute and
appoint ___________________ as its attorney-in-fact with full
power of substitution to transfer the same on the books of El
Paso Energy Partners, L.P.
Date: NOTE: The signature to any endorsement hereon must
correspond with the name as written upon the face of
this Certificate in every particular, without
alteration, enlargement or change.
THE SIGNATURE(S) SHOULD BE
GUARANTEED BY AN "ELIGIBLE
GUARANTOR INSTITUTION" AS
DEFINED IN RULE 17AD-15 UNDER
THE SECURITIES & EXCHANGE ACT OF
1934, AS AMENDED
(Signature)
SIGNATURE(S) GUARANTEED:
(Signature)
No assignment or transfer of the Common Units evidenced
hereby will be registered on the books of El Paso Energy
Partners, L.P. unless the Certificate evidencing the Common Units
to be transferred is surrendered for registration or transfer and
an Application for Transfer of Common Units (a "Transfer
Application") has been executed by a transferee either (a) on the
form set forth below or (b) on a separate application that the
Partnership will furnish on request without charge. A transferor
of the Common Units shall have no duty to the transferee with
respect to execution of the Transfer Application in order for
such transferee to obtain registration of the transfer of the
Common Units.
APPLICATION FOR TRANSFER OF COMMON UNITS
The undersigned ("Applicant") hereby applies for transfer to
the name of the Applicant of the Common Units evidenced hereby.
The Applicant (a) requests admission as a Substituted
Limited Partner and agrees to comply with and be bound by, and
hereby executes, the Second Amended and Restated Agreement of
Limited Partnership of El Paso Energy Partners, L.P., (the
"Partnership") as amended, supplemented or restated to the date
hereof (the "Partnership Agreement"), (b) represents and warrants
that the Applicant has all right, power and authority and, if an
individual, the capacity necessary to enter into the Partnership
Agreement, (c) appoints the General Partner and, if a Liquidator
shall be appointed, the Liquidator of the Partnership as the
Applicant's attorney to execute, swear to, acknowledge and file
any document, including, without limitation, the Partnership
Agreement and any amendment thereto and the Certificate of
Limited Partnership of the Partnership and any amendment thereto,
necessary or appropriate for the Applicant's admission as a
Substituted Limited Partner and as a party to the Partnership
Agreement, (d) gives the powers of attorney provided for in the
Partnership Agreement, (e) makes the waivers and gives the
consents and approvals contained in the Partnership Agreement and
(f) certifies to the Partnership that the Applicant (including,
to the best of the Applicant's knowledge, any person for whom the
Applicant will hold the Common Units) is an Eligible Citizen.
Capitalized terms not defined herein have the meanings assigned
to such terms in the Partnership Agreement.
Date:
Signature of Applicant
Name and Address of Applicant
Social Security or other identifying
Purchase Price including commissions, if any
number of Applicant
Type of Entity (check one)
[] Individual [] Partnership [] Corporation
[] Trust [] Other (specify)
Nationality (check one)
[] United States Citizen, Resident or Domestic Entity [] Non-
resident Alien [] Foreign Corporation
If the United States Citizen, Resident or Domestic Entity
box is checked, the following certification must be completed.
Under Section 1445(c) of the Internal Revenue Code of 1986,
as amended (the "Code"), the Partnership must withhold tax with
respect to certain transfers of property if a holder of an
interest in the Partnership is a foreign person. To inform the
Partnership that no withholding is required with respect to the
undersigned interest-holders interest in it, the undersigned
hereby certifies the following (or, if applicable, certifies the
following on behalf of the interest-holder):
Complete either A or B:
A. Individual Interest-Holder
1.I am not a non-resident alien for purposes of United
States income taxation.
2.My United States taxpayer identifying number (Social
Security Number) is .
3.My home address is .
4.My year end for tax reporting purposes is .
B. Partnership, Corporate or Other Interest-Holder
1. (Name of Interest-Holder)
is not a foreign corporation, foreign partnership,
foreign trust or foreign estate (as those- terms are
defined in the Code and Treasury Regulations).
2. The interest-holder's U.S. employer identification
number is .
3. The interest-holder's office address and place of
incorporation (if applicable) is
.
4. The interest-holder's year end for tax reporting
purposes is .
The interest-holder agrees to notify the Partnership within
sixty (60) days of the date the interest-holder becomes a foreign
person.
The interest-holder understands that this Certificate may be
disclosed to the Internal Revenue Service by the Partnership and
that any false statement contained herein could be punishable by
fine, imprisonment or both.
Under penalties of perjury, I declare that I have examined
this certification and to the best of my knowledge and belief it
is true, correct and complete and, if applicable, I further
declare that I have authority to sign this document on behalf of
Name of Interest-Holder
Signature and Date
Title (if applicable)
NOTE: If the Applicant is a broker, dealer, bank, trust
company, clearing corporation, other nominee holder or an agent
of any of the foregoing, and is holding the Common Units for the
account of any other person, this application should be completed
by an officer thereof or, in the case of a broker or dealer, by a
registered representative who is a member of a registered
national securities exchange or a member of the National
Association of Securities Dealers, Inc. or, in the case of any
other nominee holder, a person performing a similar function. If
the Applicant is a broker, dealer, bank, trust company, clearing
corporation, other nominee owner or an agent of any of the
foregoing, the above certification as to any Person for whom the
Applicant will hold the Common Units shall be made to the best of
the Applicant's knowledge.
EXHIBIT A-3
to the Second Amended and Restated Agreement of
Limited Partnership of
El Paso Energy Partners, L.P.
Certificate Evidencing Series B Preference Units
Representing Limited Partner Interests
EL PASO ENERGY PARTNERS, L.P.
(A limited partnership formed under the laws of Delaware)
No.__________ __________ Series B Preference Units
EL PASO ENERGY PARTNERS COMPANY, a Delaware corporation, as
the General Partner of EL PASO ENERGY PARTNERS, L.P., a Delaware
Limited partnership (the "Partnership"), hereby certifies that
____________ (the "Holder") is the registered owner of _______
Series B Preference Units representing limited partner interests
in the Partnership (the "Series B Preference Units") transferable
on the books of the Partnership, in person or by duly authorized
attorney, upon surrender of this Certificate properly endorsed
and accompanied by a properly executed application for transfer
of the Series B Preference Units represented by this Certificate.
The rights, preferences and limitations of the Series B
Preference Units are set forth in, and this Certificate and the
Series B Preference Units represented hereby are issued and shall
in all respects be subject to the terms and provisions of, the
Second Amended and Restated Agreement of Limited Partnership of
El Paso Energy Partners, L.P., as amended, supplemented or
restated from time to time (the "Partnership Agreement"). Copies
of the Partnership Agreement are on file at, and will be
furnished without charge on delivery of written request to the
Partnership at the principal office of the Partnership located at
the El Paso Building, 1001 Louisiana, Houston, Texas 77002.
Capitalized terms used herein but not defined shall have the
meanings given them in the Partnership Agreement.
The Holder, by accepting this Certificate, is deemed to have
(a) requested admission as, and agreed to become, a Limited
Partner or a Substituted Limited Partner, as applicable, and to
have agreed to comply with and be bound by and to have executed
the Partnership Agreement, (b) represented and warranted that the
Holder has all right, power and authority and, if an individual,
the capacity necessary to enter into the Partnership Agreement,
(c) appointed the General Partner and, if a Liquidator shall be
appointed, the Liquidator of the Partnership as the Holder's
attorney to execute, swear to, acknowledge and file any document,
including, without limitation, the Partnership Agreement and any
amendment thereto and the Certificate of Limited Partnership of
the Partnership and any amendment thereto, necessary or
appropriate for the Holder's admission as a Limited Partner or a
Substituted Limited Partner, as applicable, in the Partnership
and as a party to the Partnership Agreement, (d) given the powers
of attorney provided for in the Partnership Agreement, (e) made
the waivers and given the consents and approvals contained in the
Partnership Agreement and (f) certified to the Partnership that
the Holder (including, to the best of the Holder's knowledge, any
person for whom the Holder holds the Common Units) is an Eligible
Citizen.
This Certificate shall not be valid for any purpose unless
it has been countersigned and registered by the Transfer Agent
and Registrar.
EL PASO ENERGY PARTNERS COMPANY, Dated:
as General Partner
By: /s/ James H. Lytal Countersigned and Registered
by: James H. Lytal
President
CHASE MELLON SHAREHOLDER
SERVICES
By: /s/ David L. Siddall as Transfer Agent and
David L. Siddall Registrar
Secretary
By:_______________________
Authorized Signature
[Reverse of Certificate]
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this Certificate, shall be construed as follows
according to applicable laws or regulations:
TEN COM - as tenants in UNIF GIFT MIN ACT- Custodian
common
TEN ENT - as tenants by the (Cust) (Minor)
entireties
JT TEN - as joint tenants Under Uniform Gifts
with right of to Minors Act
survivorship and
not as tenants in (State)
common
Additional abbreviations, though not in the above list, may
also be used.
ASSIGNMENT OF COMMON UNITS
in
EL PASO ENERGY PARTNERS, L.P.
IMPORTANT NOTICE REGARDING INVESTOR RESPONSIBILITIES
DUE TO TAX SHELTER STATUS OF EL PASO ENERGY PARTNERS, LP.
You have acquired an interest in El Paso Energy Partners,
L.P., the El Paso Building, 1001 Louisiana, Houston, Texas 77002,
whose taxpayer identification number is 76-0385475. The Internal
Revenue Service has issued El Paso Energy Partners, L.P. the
following tax shelter registration number: __________________.
If there is no number in the blank in the preceding sentence, the
number will be furnished to the Holder when it is received.
YOU MUST REPORT THIS REGISTRATION NUMBER TO THE INTERNAL
REVENUE SERVICE IF YOU CLAIM ANY DEDUCTION, LOSS, CREDIT, OR
OTHER TAX BENEFIT OR REPORT ANY INCOME BY REASON OF YOUR
INVESTMENT IN EL PASO ENERGY PARTNERS, L.P.
You must report the registration number as well as the name
and taxpayer identification number of El Paso Energy Partners,
L.P. on Internal Revenue Code Form 8271. FORM 8271 MUST BE
ATTACHED TO THE RETURN ON WHICH YOU CLAIM THE DEDUCTION, LOSS,
CREDIT, OR OTHER TAX BENEFIT OR REPORT ANY INCOME BY REASON OF
YOUR INVESTMENT IN EL PASO ENERGY PARTNERS, L.P.
If you transfer your interest in El Paso Energy Partners,
L.P. to another person, you are required by the Internal Revenue
Service to keep a list containing (a) that person's name, address
and taxpayer identification number, (b) the date on which you
transferred the interest and (c) the name, address and tax
shelter registration number of El Paso Energy Partners, LP. If
you do not want to keep such a list, you must (1) send the
information specified above to the General Partner, who will keep
the list for this tax shelter and (2) give a copy of this notice
to the person to whom you transfer your interest Your failure to
comply with any of the above-described responsibilities could
result in the imposition of a penalty under Section 6707(b) or
6708(a) of the Internal Revenue Service Code of 1986, as amended,
unless such failure is shown to be due to reasonable cause.
ISSUANCE OF A REGISTRATION NUMBER DOES NOT INDICATE THAT
THIS INVESTMENT OR THE CLAIMED TAX BENEFITS HAVE BEEN REVIEWED,
EXAMINED, OR APPROVED BY THE INTERNAL REVENUE SERVICE.
FOR VALUE RECEIVED, __________ hereby assigns, conveys,
sells and transfers unto
(Please print or typewrite name and address of Assignee)
(Please insert Social Security or
other identifying number of
Assignee)
______________ Series B Preference Units representing limited
partner interests evidenced by this Certificate, subject to the
Partnership Agreement, and does hereby irrevocably constitute and
appoint ___________________ as its attorney-in-fact with full
power of substitution to transfer the same on the books of El
Paso Energy Partners, L.P.
Date: NOTE: The signature to any endorsement hereon must
correspond with the name as written upon the face of
this Certificate in every particular, without
alteration, enlargement or change.
THE SIGNATURE(S) SHOULD BE
GUARANTEED BY AN "ELIGIBLE
GUARANTOR INSTITUTION" AS
DEFINED IN RULE 17AD-15 UNDER
THE SECURITIES & EXCHANGE ACT OF
1934, AS AMENDED
(Signature)
SIGNATURE(S) GUARANTEED:
(Signature)
No assignment or transfer of the Series B Preference Units
evidenced hereby will be registered on the books of El Paso
Energy Partners, L.P. unless the Certificate evidencing the
Series B Preference Units to be transferred is surrendered for
registration or transfer and an Application for Transfer of
Series B Preference Units (a "Transfer Application") has been
executed by a transferee either (a) on the form set forth below
or (b) on a separate application that the Partnership will
furnish on request without charge. A transferor of the Series B
Preference Units shall have no duty to the transferee with
respect to execution of the Transfer Application in order for
such transferee to obtain registration of the transfer of the
Series B Preference Units.
APPLICATION FOR TRANSFER OF SERIES B PREFERENCE UNITS
The undersigned ("Applicant") hereby applies for transfer to
the name of the Applicant of the Series B Preference Units
evidenced hereby.
The Applicant (a) requests admission as a Substituted
Limited Partner and agrees to comply with and be bound by, and
hereby executes, the Second Amended and Restated Agreement of
Limited Partnership of El Paso Energy Partners, L.P., (the
"Partnership") as amended, supplemented or restated to the date
hereof (the "Partnership Agreement"), (b) represents and warrants
that the Applicant has all right, power and authority and, if an
individual, the capacity necessary to enter into the Partnership
Agreement, (c) appoints the General Partner and, if a Liquidator
shall be appointed, the Liquidator of the Partnership as the
Applicant's attorney to execute, swear to, acknowledge and file
any document, including, without limitation, the Partnership
Agreement and any amendment thereto and the Certificate of
Limited Partnership of the Partnership and any amendment thereto,
necessary or appropriate for the Applicant's admission as a
Substituted Limited Partner and as a party to the Partnership
Agreement, (d) gives the powers of attorney provided for in the
Partnership Agreement, (e) makes the waivers and gives the
consents and approvals contained in the Partnership Agreement and
(f) certifies to the Partnership that the Applicant (including,
to the best of the Applicant's knowledge, any person for whom the
Applicant will hold the Series B Preference Units) is an Eligible
Citizen. Capitalized terms not defined herein have the meanings
assigned to such terms in the Partnership Agreement.
Date:
Signature of Applicant
Name and Address of Applicant
Social Security or other identifying
Purchase Price including commissions, if any
number of Applicant
Type of Entity (check one)
[] Individual [] Partnership [] Corporation
[] Trust [] Other (specify)
Nationality (check one)
[] United States Citizen, Resident or Domestic Entity [] Non-
resident Alien [] Foreign Corporation
If the United States Citizen, Resident or Domestic Entity
box is checked, the following certification must be completed.
Under Section 1445(c) of the Internal Revenue Code of 1986,
as amended (the "Code"), the Partnership must withhold tax with
respect to certain transfers of property if a holder of an
interest in the Partnership is a foreign person. To inform the
Partnership that no withholding is required with respect to the
undersigned interest-holders interest in it, the undersigned
hereby certifies the following (or, if applicable, certifies the
following on behalf of the interest-holder):
Complete either A or B:
A. Individual Interest-Holder
1.I am not a non-resident alien for purposes of United
States income taxation.
2.My United States taxpayer identifying number (Social
Security Number) is .
3.My home address is .
4.My year end for tax reporting purposes is .
B. Partnership, Corporate or Other Interest-Holder
1.
(Name of Interest-Holder)
is not a foreign corporation, foreign partnership,
foreign trust or foreign estate (as those- terms are
defined in the Code and Treasury Regulations).
2.The interest-holder's U.S. employer identification
number is .
3.The interest-holder's office address and place of
incorporation (if applicable) is
.
4.The interest-holder's year end for tax reporting
purposes is .
The interest-holder agrees to notify the Partnership within
sixty (60) days of the date the interest-holder becomes a foreign
person.
The interest-holder understands that this Certificate may be
disclosed to the Internal Revenue Service by the Partnership and
that any false statement contained herein could be punishable by
fine, imprisonment or both.
Under penalties of perjury, I declare that I have examined
this certification and to the best of my knowledge and belief it
is true, correct and complete and, if applicable, I further
declare that I have authority to sign this document on behalf of
Name of Interest-Holder
Signature and Date
Title (if applicable)
NOTE: If the Applicant is a broker, dealer, bank, trust company,
clearing corporation, other nominee holder or an agent of any of
the foregoing, and is holding the Series B Preference Units for
the account of any other person, this application should be
completed by an officer thereof or, in the case of a broker or
dealer, by a registered representative who is a member of a
registered national securities exchange or a member of the
National Association of Securities Dealers, Inc. or, in the case
of any other nominee holder, a person performing a similar
function. If the Applicant is a broker, dealer, bank, trust
company, clearing corporation, other nominee owner or an agent of
any of the foregoing, the above certification as to any Person
for whom the Applicant will hold the Series B Preference Units
shall be made to the best of the Applicant's knowledge.