Second Amendment to
Agreement of Limited Partnership of
Geodyne Energy Income Limited Partnership III-G
This Second Amendment to Agreement of Limited Partnership of Geodyne Energy
Income Limited Partnership III-G (the "Partnership") is entered into by and
between Geodyne Production Company ("Production"), a Delaware corporation, as
General Partner, Geodyne Depositary Company ("Depositary"), a Delaware
corporation, as the Limited Partner, and all Substituted Limited Partners
admitted to the Partnership.
WHEREAS, on September 20, 1991, Production and Depositary executed and
entered into that certain Agreement of Limited Partnership of the Partnership
(the "Agreement"); and
WHEREAS, on February 25, 1993, Production executed and entered into that
certain First Amendment to the Agreement of Limited Partnership whereby it
changed (i) the name of the Partnership from "PaineWebber/Geodyne Energy Income
Partnership III-G" to "Geodyne Energy Income Limited Partnership III-G", (ii)
the address of the Partnership's principal place of business, and (iii) the
address for the Partnership's agent for service of process; and
WHEREAS, Section 11.1 of the Agreement provides that the General Partner
may, without prior notice or consent of any Unit Holder, amend any provision of
this Agreement if, in its opinion, such amendment does not have a material
adverse effect upon the Unit Holders; and
WHEREAS, Production as General Partner desires to amend the Agreement in
order to (i) expedite the method of accepting transfers of Unit Holders' Units
in the Partnership and (ii) provide for an optional right of
repurchase/redemption which may be exercised by the Unit Holders.
NOW, THEREFORE, in consideration of the covenants, conditions and
agreements herein contained, the parties hereto hereby agree as follows:
I. The third sentence contained in Section 7.3 of the Agreement is hereby
amended and restated as follows:
Unit Holders becoming Substituted Limited Partners will be admitted
to the Partnership monthly.
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II. The second sentence contained in Section 7.3 of the Agreement, which
sentence required the payment by Unit Holders of a fee (not to exceed
$100) for legal and administrative costs associated with the transfer of
a Partnership Unit, is hereby deleted.
III. The first sentence contained in Section 8.1E of the Agreement is
hereby amended and restated as follows:
Unless otherwise provided by the General Partner, any sale,
assignment or transfer of Units shall be recognized by the
Partnership as of the first business day of the calendar month
following the approval of such assignment or transfer by the General
Partner, or as soon thereafter as practicable.
IV. The second sentence of Section 8.1E of the Agreement referring to
quarterly approvals of transfers is hereby deleted.
V. Section 8.3I of the Agreement, which section required the payment by
Unit Holders of a fee (not to exceed $50) for expenses associated with
a transfer is hereby deleted.
VI. Section 8.2B(3) of the Agreement, which section required the payment by
Unit Holders of a fee (not to exceed $50) for expenses associated with
the General Partner's acceptance of a Substituted Limited Partner is
hereby deleted.
VII. The first full sentence of Section 8.1(iv) of the Agreement is hereby
amended and restated as follows:
For purposes of this subsection, the "Permitted Transfers" shall
mean: (1) transfers in which the basis of the Units in the hands of
the transferee is determined, in whole or in part, by reference to
its basis in the hands of the transferor or is determined under
Section 732 of the Code; (2) transfers at death; (3) transfers
between members of a family (as defined in Section 267(c)(4) of the
Code); (4) the issuance of Units by or on behalf of the Partnership
in exchange for cash, property or services; (5) distributions from a
retirement plan qualified under Section 401(a) of the Code; (6)
Block Transfers; and (7) transfers pursuant to Article Fifteen of
this Agreement.
VIII. The Agreement is hereby amended to provide for a new Article Fifteen.
Said Article Fifteen is hereby stated as follows:
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Article Fifteen
Optional Repurchase/Redemption Provisions
Section 15.1. Optional Repurchase Right.
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Any Unit Holder or Substituted Limited Partner shall have the
right, at his option, to present his Units to the General Partner or
its designated Affiliate for repurchase on the basis set forth in
this Article Fifteen.
Section 15.2. Procedure for Repurchase.
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A. As of December 31, 1992 and annually thereafter (the
"Appraisal Date") the General Partner shall appraise the Proved
Reserves and other assets of the Partnership pursuant to the
provisions set forth herein and shall assign a repurchase price (the
"Repurchase Price") to the Unit Holders' Units in the Partnership in
accordance with the provisions set forth herein.
B. In arriving at the Repurchase Price, the General Partner
shall consider those factors deemed relevant by it including,
without limitation, the following:
(i) the present value of the estimated
future net revenues of the Partnership's Proved Reserves,
calculated as described below; and
(ii)the book value of all other
Partnership assets and liabilities.
Section 15.3. Calculation of Present Value of the
Partnership's Estimated Future Net Revenues.
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In calculating the present value of the Partnership's Estimated
Future Net Revenues the General Partner shall use the petroleum
engineering reports and other petroleum reserve information required
to be furnished to the Unit Holders pursuant to Section 10.4C of the
Agreement.
Future gross revenues expected to be derived from the production
and sale of the Proved Reserves attributable to the Partnership's
Producing Properties shall be estimated using either (i) escalations
of future sales prices of Hydrocarbons supplied by the General
Partner (the "Escalated Case") or (ii) sales prices of Hydrocarbons
provided by Regulation S-X adopted by the Securities and Exchange
Commission (the "SEC Case"), as the General Partner may determine in
its sole discretion.
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Future net revenues shall be calculated by deducting anticipated
expenses (using either (i) escalations of future costs supplied by
the General Partner if the General Partner adopted the Escalated
Case with respect to future sales prices of Hydrocarbons or (ii)
constant future costs if the General Partner adopted the SEC Case
with respect to future sales prices of Hydrocarbons) from estimated
future gross revenues.
The present value of the future net revenues shall be calculated
by discounting the estimated future net revenues at either 10% (if
the General Partner employed future pricing criteria in accordance
with the SEC Case) or that rate per annum which is one percentage
point higher than the prime rate of interest of The Chase Manhattan
Bank, N.A. or any successor bank, as of the Appraisal Date (if the
General Partner employed pricing criteria in accordance with the
Escalated Case, provided, however, that such discount rate will not
exceed 18% per annum and will be no less than 10% per annum).
Section 15.4. Risk Reduction.
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In determining the Repurchase Price for Unit Holders pursuant to
this Article Fifteen, the present value of the Partnership's Proved
Developed Producing Reserves shall be reduced by 25% for risk and
the present value of all other categories of Proved Reserves shall
be reduced by 35% for risk. The risk reductions shall be subject to
upward or downward adjustment by the General Partner if, during the
period between the Appraisal Date and the Effective Date (as defined
in Section 15.5), there has been a material increase or decrease in
the current price of oil or gas or in the estimated amount of the
Partnership's Proved Reserves.
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Section 15.5. Tender Procedure.
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Upon completion of the appraisal of the Partnership's assets as
of the Appraisal Date, the General Partner shall notify each Unit
Holder of the Repurchase Price and his proportionate share thereof
and either the General Partner or one of its Affiliates will offer
to purchase such Unit Holder's Units in exchange for such Unit
Holder's proportionate share of the Repurchase Price (a "Repurchase
Offer"). Any Unit Holder desiring to do so may accept such
Repurchase Offer by notifying the General Partner of his election.
Unit Holders so notifying the General Partner shall be referred to
herein as "Electing Unit Holders". The General Partner or its
designated Affiliate shall thereupon promptly pay to each Electing
Unit Holder, his proper share of the Repurchase Price, calculated as
herein set forth, within 30 days from the date which a properly
drawn assignment of such Electing Unit Holder's interest, free and
clear of all liens and encumbrances, is tendered to and accepted by
the General Partner or its designated Affiliate (the "Effective
Date"). Upon the acquisition of an Electing Unit Holder's Units, the
General Partner or its designated Affiliate shall, as of the
Effective Date of such acquisition, succeed to all the rights and
obligations attributable to such interest.
Section 15.6. Monthly Adjustment to Repurchase Price.
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The Repurchase Price shall be recalculated monthly with the
Repurchase Price being reduced by the amount of any cash
distributions to Unit Holders during the period from the Appraisal
Date to the date of the payment of the Repurchase Price and shall
otherwise be adjusted to reflect the effect of material operations
during such period, including a material increase or decrease in the
current price of oil or gas or in the estimated amount of the
Partnership's Proved Reserves. In the event the Repurchase Price is
adjusted for any reason other than to reflect the payment of cash
distributions, the General Partner shall provide written
notification of such adjustment to the Unit Holders at least ten
(10) business days prior to acceptance of Units for purchase.
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Section 15.7. Limitation on Units Repurchased.
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A. At the sole discretion of the General Partner, the General
Partner or its designated Affiliate may either (i) limit the time
period in which it will accept tendered Units for repurchase or (ii)
limit the amount of Units to be accepted for repurchase; provided,
however, that in any event the annual repurchase offer will (i)
remain open for at least thirty (30) days and (ii) the General
Partner or its designated Affiliate will offer to annually
repurchase (and will purchase validly presented Units) at least 10%
of the outstanding Units of the Partnership. In the event the
General Partner or its designated Affiliate imposes a limitation,
the General Partner will either (i) specify such limitation(s) in
the annual Repurchase Offer mailed to the Unit Holders or (ii)
provide all Unit Holders with written notification of such
limitation(s) at least thirty (30) days prior to the effective date
of any such limitation(s).
B. In the event the General Partner imposes a limitation upon
the number of Units to be repurchased in the Partnership, and the
amount of Units tendered, but not repurchased, exceeds such
limitation, such tendered Units will be accepted for repurchase by
lot.
C. In addition, in order to avoid certain possible adverse tax
consequences, the General Partner may, in order to comply with the
regulations or procedures under Section 469(k) of the Internal
Revenue Code of 1986, as amended, relating to "publicly traded
partnerships," (i) delay or defer the Effective Date of any
repurchase and (ii) limit the total number of Units of any
Partnership to be repurchased in any 12-month period to the maximum
number provided in such regulations and procedures. In the event of
such delay or deferral, the General Partner shall notify the
Electing Unit Holder of the reasons therefor and shall provide the
Electing Unit Holder with the option to withdraw his tender of Units
for repurchase.
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IN WITNESS WHEREOF, the parties hereto have hereunto set their hands as
of the 4th day of August, 1993.
Geodyne Production Company
as General Partner
By: /s/ C. Xxxxxx Xxxxxx
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C. Xxxxxx Xxxxxx
President
Geodyne Depositary Company, as the
Limited Partner
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Senior Vice President
Geodyne Production Company, as
Attorney-in-Fact for all Substituted
Limited Partners
By: /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
Vice President - Controller
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