AGREEMENT OF LIMITED PARTNERSHIP OF CENTRAL ENERGY, LP
AGREEMENT
OF LIMITED PARTNERSHIP
OF
This
Agreement of Limited Partnership (this “Agreement”)
of Central Energy, LP dated as of April 19, 2010 is entered into by Central
Energy, LLC (the “General
Partner”) and the limited partners who have executed a Limited Partner
Signature Page to be attached hereto (collectively, the “Limited
Partners” and, collectively with the General Partner, the “Partners”)
pursuant to and in accordance with the Delaware Revised Uniform Limited
Partnership Act (6 Del.C. § 17-101,
et seq.), as amended
from time to time (the “Act”).
1. Name. The
name of the partnership governed hereby is Central Energy, LP (the “Partnership”).
2. Certificate of Limited
Partnership. The General Partner has filed a Certificate of
Limited Partnership for the Partnership with the Secretary of State of the State
of Delaware, and the Partners shall take such further actions as shall be
appropriate to comply with all requirements of law for the formation and
operation of a limited partnership in the State of Delaware, and all other
counties and states where the Partnership may elect to do business.
3. Purpose. The
Partnership is formed for the object and purpose of, and the nature of the
business to be conducted and promoted by the Partnership is, engaging in all
lawful activities for which partnerships may be formed under the
Act.
4. Powers. The
Partnership shall have the power to do any and all acts reasonably necessary,
appropriate, proper, advisable, incidental or convenient to or for the
furtherance of the purpose and business described herein and for the protection
and benefit of the Partnership and shall have, without limitation, any and all
of the powers that may be exercised on behalf of the Partnership by the General
Partner pursuant to this Agreement, including Section 16.
5. Principal Business
Office. The principal place of business and office of the
Partnership shall be located at, and the Partnership’s business shall be
conducted from, such place or places as may hereafter be determined by the
General Partner.
6. Registered
Office. The address of the registered office of the
Partnership in the State of Delaware is c/o National Corporate Research, Ltd.,
000 Xxxxx XxXxxx Xxxxxxx, Xxxxx, Xxxxxxxx 00000.
7. Registered
Agent. The name and address of the registered agent of the
Partnership for service of process on the Partnership in the State of Delaware
are National Corporate Research, Ltd., 000 Xxxxx XxXxxx Xxxxxxx, Xxxxx, Xxxxxxxx
00000.
8. Term. The
term of the Partnership commenced on the date of filing of the Certificate of
Limited Partnership of the Partnership in accordance with the Act and shall
continue until dissolution of the Partnership in accordance with Section 23 of
this Agreement.
9. Limitation on Liabilities of
Limited Partners. Notwithstanding any provision of this
Agreement, the Limited Partners shall not be liable for any of the losses, debts
or liabilities of the Partnership in excess of their respective Capital
contributions.
10. Issuance of Class A and
Class B Limited Partner Interests. The Company shall be
authorized to issue Class A and Class B Limited Partner
Interests. The Class A and Class B Limited Partnership Interests
shall be entitled to participate in Distributions as set forth in Paragraph 15
of this Agreement.
11. Capital
Contributions. Each Partner is deemed admitted as a Partner of
the Partnership upon his or its execution and delivery of the Limited Partner
Signature Page to be attached to this Agreement. The contribution of
the General Partner and the contributions of the Limited Partners with respect
to their Class A and Class B Limited Partnership Interests are set forth on
Schedule A
attached hereto. The total capital of a Partner in the Partnership
from time to time shall be referred to as such Partner’s “Capital.”
12. Additional
Contributions. The Partners are not required to make
additional Capital contributions to the Partnership.
13. Capital
Accounts. Separate Capital accounts (“Capital
Accounts”) shall be maintained for each Partner on the books of the
Partnership, which Capital Accounts shall set forth the Capital of such Partner
in the Partnership. Each Capital Account shall be adjusted to reflect
such Partner’s shares of allocations and distributions as provided in Section 14
of this Agreement, and any additional Capital contributions to the Partnership
or withdrawals of Capital from the Partnership. Such Capital Accounts
shall further be adjusted to conform to the Treasury Regulations under Section
704(b) of the Internal Revenue Code of 1986, as amended (the “Code”), as
interpreted in good faith by the General Partner.
14. Profits and
Losses. The Profits or Losses incurred by the Partnership for
each taxable year shall be determined on an annual basis. For each
taxable year in which the Partnership realizes Profits or Losses, such Profits
or Losses, respectively, shall be allocated to each Partner in accordance with
the ratio which such Partner’s Capital Account in the Partnership bears to the
total Capital of all Partners in the Partnership at the time of such
allocation. As used herein, “Profits”
and “Losses”
mean, for each fiscal year or other period, an amount equal to the Partnership’s
taxable income or loss for such year or period, determined in accordance with
Section 703(a) of the Code (for this purpose, all items of income, gain, loss or
deduction required to be stated separately pursuant to Section 703(a)(1) of the
Code shall be included in taxable income or loss), with the following
adjustments:
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(i) Any
income of the Partnership that is exempt from federal income tax and not
otherwise taken into account in computing Profits or Losses shall be added to
such taxable income or loss; or
(ii) Any
expenditures of the Partnership described in Section 705(a)(2)(B) of the Code or
treated as Section 705(a)(2)(B) of the Code expenditures pursuant to Regulations
Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing
Profits or Losses shall be subtracted from such taxable income or
loss.
15. Allocations and
Distributions.
a. Allocations of Profit and
Loss. Whenever a proportionate part of the Partnership’s
Profit and Loss is allocated to a Partner, every item of income, gain, loss,
deduction and credit entering into the computation of such Profit or Loss
applicable to the period during which such Profit or Loss was realized, shall be
allocated to such Partner in the same proportion.
b. Distributions. Subject
to the provisions of subparagraph (b) below, distributions shall be made to the
Partners at such times and in such amounts in accordance with their Capital
Accounts as may be determined by the General Partner. Distributions
shall be shared among the Partners in accordance with their Capital
Accounts. Notwithstanding any provision to the contrary contained in
this Agreement, the Partnership shall not make a distribution to the Partners on
account of their interest in the Partnership if such distribution would violate
Section 17-607 of the Act or other applicable law.
c. Rio Vista
Transaction. The General Partner has assigned and contributed to the
Partnership that certain Securities Purchase and Sale Agreement by and between
the General Partner, Rio Vista Energy Partners, L.P. and Penn Octane Corporation
dated May 25, 2010 (the “Rio Vista
SPA”), as amended, under which inter alia, the Partnership,
as assignee of the General Partner, has agreed to purchase (a) limited
partnership interests in Rio Vista Energy Partners, L.P., a Delaware Master
Limited Partnership, (“Rio
Vista”) which when issued will constitute not less than eighty percent
(80%) of the fully diluted common units of Rio Vista (the “Rio Vista LP
Interests”) and (b) one hundred percent (100%) of the limited liability
company interests of Rio Vista GP, LLC, the general partner of Rio Vista (the
“Rio Vista
GP Interests”). The transactions contemplated by the Rio Vista
SPA are referred to herein as the “Rio Vista
Transaction”. Promptly after the final closing of the Rio
Vista Transaction, but no later than January 31, 2011, the General Partner will
distribute to the Limited Partners (a) in proportion to their Class A Sharing
Percentages as set out in Schedule A hereto, the Rio Vista GP Interests acquired
by the Partnership in the Rio Vista Transaction and (b) in proportion to their
Class B Sharing Percentages the Rio Vista LP Interests acquired by the
Partnership in the Rio Vista Transaction. In the event that there are
any distributions from Rio Vista to the Partnership with respect to the Rio
Vista GP Interests or the Rio Vista LP Interests prior to the distribution of
such Interests to the Limited Partners as hereinabove provided, the General
Partner shall promptly distribute such amounts to the Limited Partners in
accordance with their Class A Sharing Percentages and/or Class B Sharing
Percentages as applicable.
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16. Management.
a. The
business and affairs of the Partnership shall be managed by the General
Partner. Subject to the express limitations contained in any
provision of this Agreement, the General Partner shall have complete and
absolute control of the affairs and business of the Partnership, and shall
possess all powers necessary, convenient or appropriate to carrying out the
purposes and business of the Partnership, including, without limitation, doing
all things and taking all actions necessary to carrying out the terms and
provisions of this Agreement.
b. Subject
to the rights and powers of the General Partner and the limitations thereon
contained herein, the General Partner may delegate to any person any or all of
its powers, rights and obligations under this Agreement and may appoint,
contract or otherwise deal with any person to perform any acts or services for
the Partnership as the General Partner may reasonably determine.
c. No
Partner (other than the General Partner) shall participate in the management or
control of the business of, or shall have any rights or powers with respect to,
the Partnership except those expressly granted to it by the terms of this
Agreement, or those conferred on it by law.
d. The
General Partner shall not be compensated for its services as the general partner
of the Partnership without the consent of a majority of the
Partners. However, the General Partner shall be entitled to be
reimbursed by the Partnership for all expenses incurred by the General Partner
or its Members in connection with the Rio Vista Transaction and in performing
its duties as General Partner under this Agreement.
17. Officers. The
General Partner may, from time to time as it deems advisable, appoint officers
of the Partnership (the “Officers”) and assign
in writing titles (including, without limitation, President, Vice President,
Secretary and Treasurer) to any such person. Unless the General
Partner decides otherwise, if the title is one commonly used for officers of a
business corporation formed under the Delaware General Corporation Law, the
assignment of such title shall constitute the delegation to such person of the
authorities and duties that are normally associated with that
office. Any delegation pursuant to this Section 16 may be revoked at
any time by the General Partner.
18. Other
Business. The Partners may engage in or possess an interest in
other business ventures (unconnected with the Partnership) of every kind and
description, independently or with others. The Partnership shall not
have any rights in or to such independent ventures or the income or profits
therefrom by virtue of this Agreement.
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19. Liability of General
Partner.
a. The
General Partner shall not be liable, responsible or accountable in damages to
the Limited Partners or the Partnership for (x) any act or omission on behalf of
the Partnership performed or omitted to be taken by it in good faith and in a
manner reasonably believed by it to be within the scope of the authority granted
to it by this Agreement and in, or not opposed to, the best interests of the
Partnership, provided that the General Partner is not guilty of gross negligence
or willful misconduct, (y) any action or omission taken or suffered by any other
Partner or (z) any mistake, negligence, dishonesty or bad faith of any broker or
other agent of the Partnership selected by the General Partner with reasonable
care. To the extent that, at law or in equity, the General Partner
has duties (including fiduciary duties) and liabilities relating thereto to the
Partnership or to another Partner, the General Partner acting under this
Agreement shall not be liable to the Partnership or such other Partner for its
good faith reliance on the provisions of this Agreement. The
provisions of this Agreement, to the extent that they expand or restrict the
duties and liabilities of the General Partner otherwise existing at law or in
equity, are agreed by the Partners to modify to that extent such other duties
and liabilities of the General Partner. To the fullest extent
permitted by law, the Partnership shall indemnify the General Partner against
any loss, damage or expense (including amounts paid in satisfaction of
judgments, in settlements, as fines and penalties and legal and other costs and
expenses of investigation or defense) incurred by it by reason of any act or
omission so performed or omitted by it (and not involving gross negligence or
willful misconduct) and any such amount shall be paid by the Partnership to the
extent assets are available, but the Limited Partners shall not have any
personal liability to the General Partner or the Partnership on account of such
loss, damage or expense.
b. The
General Partner may consult with legal counsel, accountants and other
professional experts selected by it and any act or omission suffered or taken by
it on behalf of the Partnership or in furtherance of the interests of the
Partnership in good faith in reliance upon and in accordance with the advice of
such counsel, accountants or other professional experts shall be full
justification for any such act or omission, and the General Partner shall be
fully protected in so acting or omitting to act, provided such counsel,
accountants or other professional experts were selected with reasonable
care.
c. To
the fullest extent permitted by law, expenses incurred by the General Partner in
defense or settlement of any claim that may, at the determination of the General
Partner, be subject to a right of indemnification hereunder may be paid by the
Partnership in advance of the final disposition thereof upon receipt of an
undertaking by or on behalf of the General Partner to repay such amount to the
Partnership if it shall be determined, by a court of competent jurisdiction
pursuant to a final non-appealable judgment, order or decree, that the General
Partner is not entitled to be indemnified hereunder.
20. Admission of Additional
Partners. One (1) or more additional persons may be admitted
to the Partnership as Partners with the written consent of the General Partner;
provided that no such admission of an additional Limited Partner shall operate
to reduce the Class A Sharing Percentage or Class B Sharing Percentage of any
previously admitted Limited Parter..
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21. Dissolution of the
Partnership. Subject to Section 23, the termination,
dissolution, death, bankruptcy or adjudicated incompetency of a Partner shall
not cause a dissolution of the Partnership, but the rights of such Partner to
share in the Profits and Losses of the Partnership, to receive distributions and
to assign his or its interest in the Partnership pursuant to Section 22 shall,
on the happening of such an event, devolve on his or its legal representative
for the purpose of settling his estate or administering its
property.
22. Assignments. A
Partner may not transfer, assign, pledge or hypothecate, in whole or in part,
his or its limited partnership interest without the prior written consent of the
General Partner.
23. Dissolution.
a. The
Partnership shall dissolve, and its affairs shall be wound up upon the first to
occur of the following: (i) following the distributions provided for
in Section 15(c) hereof, (ii) the termination, dissolution, bankruptcy or
other event of withdrawal of the General Partner or at any time there are no
limited partners, unless the business of the Partnership is continued in
accordance with the Act and (iii) the entry of a decree of judicial dissolution
under Section 17-802 of the Act.
b. In
the event of dissolution, the Partnership shall conduct only such activities as
are necessary to wind up its affairs (including the sale of the assets of the
Partnership in an orderly manner) and, subject to the provisions of Paragraph
15(c) hereof, shall distribute the assets of the of the Partnership to the
Partners in accordance with their respective Capital Accounts.
24. Tax Matters
Partner. The General Partner shall be the tax matters partner
within the meaning of Section 6231(a)(7) of the Code. All expenses
incurred by the tax matters partner in connection with its duties as tax matters
partner shall be expenses of the Partnership.
25. Elections. The
General Partner shall determine the accounting methods and conventions under the
tax laws of any and all applicable jurisdictions as to the treatment of income,
gain, loss, deduction and credit of the Partnership or any other method or
procedure related to the preparation of such tax returns. The General
Partner may cause the Partnership to make or refrain from making any and all
elections permitted by such tax laws, and the General Partner shall not be
liable for any consequences to any previously admitted or subsequently admitted
Partners resulting from their making or failing to make any such
elections.
26. Severability of
Provisions. Each provision of this Agreement shall be
considered severable and if for any reason any provision or provisions herein
are determined to be invalid, unenforceable or illegal under any existing or
future law, such invalidity, unenforceability or illegality shall not impair the
operation of or affect those portions of this Agreement which are valid,
enforceable and legal.
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27. Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original of this Agreement.
28. Entire
Agreement. This Agreement constitutes the entire agreement of
the Partners with respect to the subject matter hereof.
29. Governing
Law. This Agreement shall be governed by, and construed under,
the laws of the State of Delaware (without regard to conflict of laws principles
thereof), and all rights and remedies shall be governed by such
laws.
30. Amendments. This
Agreement may not be modified, altered, supplemented or amended except pursuant
to a written agreement executed and delivered by the Partners.
IN WITNESS WHEREOF, the undersigned,
intending to be legally bound hereby, have duly executed this Agreement as of
the date first written above.
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GENERAL
PARTNER:
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CENTRAL
ENERGY, LLC
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By:
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/s/ Xxxxxx X. Xxxxxxxxxx
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Name:
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Xxxxxx
X. Xxxxxxxxxx
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Title:
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Manager
Member
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By:
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Xxxx X. Xxxxxxx
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Name:
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Xxxx
X. Xxxxxxx
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Title:
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Manager
Member
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LIMITED
PARTNERSHIP AGREEMENT
LIMITED
PARTNER SIGNATURE PAGE
By its
signature below, the undersigned hereby agrees that effective as of the date of
its admission to Central Energy, LP as a Limited Partner it shall (i) be bound
by each and every term and provision of the Limited Partnership Agreement, as
the same may be amended from time to time in accordance with the provisions
thereof, and (ii) become and be a party to said Limited Partnership
Agreement.
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(Type
or Print Name)
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(Signature)
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(Representative
capacity, if any)
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Date
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8
Schedule
A
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Name
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Capital
Contributions
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Capital
Contributions
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||||||||||||||
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General
Partner:
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$ | _____________ | ||||||||||||||
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Central
Energy, LLC
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||||||||||||||||
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Limited Partners:
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Class A Interests
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Class A Sharing
Percentage
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Class B Interests
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Class B Sharing
Percentage
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||||||||||||
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Central
Energy, LLC
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$ | [__ | ] | ____ | % | $ | 0 | 0 | % | |||||||
| $ | [__ | ] | ____ | % | $ | [__ | ] | ____ | % | |||||||
| $ | [__ | ] | ____ | % | $ | [__ | ] | ____ | % | |||||||
| $ | [__ | ] | ____ | % | $ | [__ | ] | ____ | % | |||||||
| $ | [__ | ] | ____ | % | $ | [__ | ] | ____ | % | |||||||
| $ | [__ | ] | ____ | % | $ | [__ | ] | ____ | % | |||||||
| $ | [__ | ] | ____ | % | $ | [__ | ] | ____ | % | |||||||
| $ | [__ | ] | ____ | % | $ | [__ | ] | ____ | % | |||||||
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