AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF DUNCAN ENERGY PARTNERS L. P.
Exhibit 3.1
Execution Copy
AMENDED AND RESTATED
OF
XXXXXX ENERGY PARTNERS L. P.
TABLE OF CONTENTS
Page
ARTICLE I |
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Definitions |
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1.1
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Definitions | 1 | ||||
1.2
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Construction | 1 | ||||
ARTICLE II |
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Organization |
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2.1
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Formation | 2 | ||||
2.2
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Name | 2 | ||||
2.3
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Registered Office; Registered Agent; Principal Office; Other Offices | 2 | ||||
2.4
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Purpose and Business | 2 | ||||
2.5
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Powers | 2 | ||||
2.6
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Power of Attorney | 2 | ||||
2.7
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Term | 3 | ||||
2.8
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Title to Partnership Assets | 3 | ||||
2.9
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Certain Undertakings Relating to the Separateness of the Partnership | 4 | ||||
ARTICLE III |
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Rights of Limited Partners |
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3.1
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Limitation of Liability | 6 | ||||
3.2
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Management of Business | 6 | ||||
3.3
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Outside Activities of the Limited Partners | 6 | ||||
3.4
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Rights of Limited Partners | 6 | ||||
ARTICLE IV |
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Certificates; Record Holders; Transfer of Partnership Interests; |
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Redemption of Partnership Interests |
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4.1
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Certificates | 7 | ||||
4.2
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Mutilated, Destroyed, Lost or Stolen Certificates | 7 | ||||
4.3
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Record Holders | 7 | ||||
4.4
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Transfer Generally | 8 | ||||
4.5
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Registration and Transfer of Limited Partner Interests | 8 | ||||
4.6
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Transfer of General Partner Interest | 9 | ||||
4.7
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Restrictions on Transfers | 9 | ||||
4.8
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Citizenship Certificates; Non-citizen Assignees | 10 | ||||
4.9
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Redemption of Partnership Interests of Non-citizen Assignees | 11 | ||||
ARTICLE V |
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Capital Contributions and Issuance of Partnership Interests |
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5.1
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Prior Contributions | 12 | ||||
5.2
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Contributions by the General Partner and its Affiliates | 12 | ||||
5.3
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Contributions by the Underwriters and Redemption of Common Units if Over-Allotment Option is Exercised | 12 | ||||
5.4
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Interest and Withdrawal | 13 | ||||
5.5
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Capital Accounts | 13 | ||||
5.6
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Issuances of Additional Partnership Securities | 15 | ||||
5.7
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Limited Preemptive Right | 16 | ||||
5.8
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Splits and Combinations | 16 | ||||
5.9
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Fully Paid and Non-Assessable Nature of Limited Partner Interests | 16 |
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ARTICLE VI |
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Allocations and Distributions |
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6.1
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Allocations for Capital Account Purposes | 16 | ||||
6.2
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Allocations for Tax Purposes | 19 | ||||
6.3
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Requirement and Characterization of Distributions; Distributions to Record Holders | 21 | ||||
ARTICLE VII |
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Management and Operation of Business |
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7.1
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Management | 22 | ||||
7.2
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Certificate of Limited Partnership | 23 | ||||
7.3
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Restrictions on General Partner’s Authority | 24 | ||||
7.4
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Reimbursement of the General Partner | 24 | ||||
7.5
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Outside Activities | 25 | ||||
7.6
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Loans from the General Partner; Loans or Contributions from the Partnership; Contracts with Affiliates; Certain Restrictions on the General Partner. | 25 | ||||
7.7
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Indemnification | 27 | ||||
7.8
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Liability of Indemnitees | 28 | ||||
7.9
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Resolution of Conflicts of Interest; Standard of Conduct and Modification of Duties | 28 | ||||
7.10
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Other Matters Concerning the General Partner | 30 | ||||
7.11
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Purchase or Sale of Partnership Securities | 30 | ||||
7.12
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Registration Rights of the General Partner and its Affiliates | 30 | ||||
7.13
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Reliance by Third Parties | 33 | ||||
ARTICLE VIII |
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Books, Records, Accounting and Reports |
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8.1
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Records and Accounting | 33 | ||||
8.2
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Fiscal Year | 34 | ||||
8.3
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Reports | 34 | ||||
ARTICLE IX |
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Tax Matters |
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9.1
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Tax Returns and Information | 34 | ||||
9.2
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Tax Elections | 34 | ||||
9.3
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Tax Controversies | 35 | ||||
9.4
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Withholding | 35 | ||||
ARTICLE X |
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Admission of Partners |
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10.1
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Admission of Limited Partners | 35 | ||||
10.2
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Admission of Successor General Partner | 35 | ||||
10.3
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Amendment of Agreement and Certificate of Limited Partnership | 36 | ||||
ARTICLE XI |
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Withdrawal or Removal of Partners |
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11.1
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Withdrawal of the General Partner | 36 | ||||
11.2
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Removal of the General Partner | 37 | ||||
11.3
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Interest of Departing General Partner and Successor General Partner | 37 | ||||
11.4
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Withdrawal of Limited Partners | 39 | ||||
ARTICLE XII |
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Dissolution and Liquidation |
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12.1
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Dissolution | 39 | ||||
12.2
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Continuation of the Business of the Partnership After Dissolution | 39 | ||||
12.3
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Liquidator | 40 | ||||
12.4
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Liquidation | 40 | ||||
12.5
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Cancellation of Certificate of Limited Partnership | 41 | ||||
12.6
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Return of Contributions | 41 |
ii
12.7
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Waiver of Partition | 41 | ||||
12.8
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Capital Account Restoration | 41 | ||||
12.9
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Certain Prohibited Acts | 41 | ||||
ARTICLE XIII |
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Amendment of Partnership Agreement; Meetings; Record Date |
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13.1
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Amendments to be Adopted Solely by the General Partner | 41 | ||||
13.2
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Amendment Procedures | 42 | ||||
13.3
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Amendment Requirements | 43 | ||||
13.4
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Special Meetings | 44 | ||||
13.5
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Notice of a Meeting | 44 | ||||
13.6
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Record Date | 44 | ||||
13.7
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Adjournment | 44 | ||||
13.8
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Waiver of Notice | 44 | ||||
13.9
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Quorum | 44 | ||||
13.10
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Conduct of a Meeting | 45 | ||||
13.11
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Action Without a Meeting | 45 | ||||
13.12
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Voting and Other Rights | 45 | ||||
ARTICLE XIV |
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Merger, Consolidation or Conversion |
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14.1
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Authority | 46 | ||||
14.2
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Procedure for Merger, Consolidation or Conversion | 46 | ||||
14.3
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Approval by Limited Partners | 48 | ||||
14.4
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Certificate of Merger | 49 | ||||
14.5
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Effect of Merger, Consolidation or Conversion | 49 | ||||
14.6
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Amendment of Partnership Agreement | 50 | ||||
ARTICLE XV |
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Right to Acquire Limited Partner Interests |
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15.1
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Right to Acquire Limited Partner Interests | 50 | ||||
ARTICLE XVI |
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General Provisions |
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16.1
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Addresses and Notices | 52 | ||||
16.2
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Further Action | 52 | ||||
16.3
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Binding Effect | 52 | ||||
16.4
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Integration | 52 | ||||
16.5
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Creditors | 52 | ||||
16.6
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Waiver | 52 | ||||
16.7
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Counterparts | 52 | ||||
16.8
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Applicable Law | 52 | ||||
16.9
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Invalidity of Provisions | 52 | ||||
16.10
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Consent of Partners | 52 | ||||
Attachment I—Defined Terms |
iii
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF XXXXXX ENERGY PARTNERS L.P.
OF XXXXXX ENERGY PARTNERS L.P.
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF XXXXXX ENERGY PARTNERS L.P.
dated effective as of February 5, 2007, is entered into by and among DEP Holdings, LLC, a Delaware
limited liability company, as the General Partner, together with any other Persons who become
Partners in the Partnership or parties hereto as provided herein. In consideration of the
covenants, conditions and agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE I
Definitions
Definitions
1.1 Definitions. The definitions listed on Attachment I shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
1.2 Construction. Unless the context requires otherwise: (a) 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; (b) references to Articles and Sections refer to
Articles and Sections of this Agreement; (c) the terms “include”, “includes”, “including” or words
of like import shall be deemed to be followed by the words “without limitation”; and (d) the terms
“hereof”, “herein” or “hereunder” refer to this Agreement as a whole and not to any particular
provision of this Agreement. The table of contents and headings contained in this Agreement are
for reference purposes only, and shall not affect in any way the meaning or interpretation of this
Agreement.
ARTICLE II
Organization
Organization
1
2.1 Formation. The Partnership has been previously formed as a limited partnership pursuant to the provisions
of the Delaware Act. The General Partner and the Limited Partners hereby amend and restate in its
entirety the Agreement of Limited Partnership of Xxxxxx Energy Partners L.P., dated as of September
29, 2006. 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. This amendment and restatement shall become effective on the date of this Agreement.
Except as expressly provided to the contrary in this Agreement, the rights, duties (including
fiduciary duties), liabilities and obligations of the Partners and the administration, dissolution
and termination of the Partnership shall be governed by the Delaware Act. All Partnership Interests
shall constitute personal property of the owner thereof for all purposes.
2.2 Name. The name of the Partnership shall be “Xxxxxx Energy Partners L.P.” The Partnership’s business
may be conducted under any other name or names as determined by the General Partner, including the
name of the General Partner. The words “Limited Partnership,” “L.P.,” “Ltd.” or similar words or
letters shall be included in the Partnership’s name where necessary for the purpose of complying
with the laws of any jurisdiction that so requires. The General Partner 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 the Limited Partners.
2.3 Registered Office; Registered Agent; Principal Office; Other Offices. Unless and until changed by the General Partner, the registered office of the Partnership in the
State of Delaware shall be located at 0000 Xxxxxx Xxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000, and the registered agent for service of process on the Partnership in the State of Delaware
at such registered office shall be The Corporation Trust Company. The principal office of the
Partnership shall be located at 0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxx 00000
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 necessary or appropriate. The address of the General
Partner shall be 0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxx 00000 or such other
place as the General Partner may from time to time designate by notice to the Limited Partners.
2.4 Purpose and Business. The purpose and nature of the business to be conducted by the Partnership shall be (a) to engage
directly in, or form, hold and dispose of any corporation, partnership, joint venture, limited
liability company or other arrangement to engage indirectly in, any business activity that is
approved by the General Partner and 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, and (b) to do anything necessary or appropriate to the foregoing, including the making of
capital contributions or loans to any Group Member; provided, however, that the General Partner
shall not cause the Partnership to engage, directly or indirectly in any business activity that the
General Partner determines would cause the Partnership or the Operating Partnership to be treated
as an association taxable as a corporation or otherwise taxable as an entity for federal income tax
purposes. To the fullest extent permitted by law, the General Partner shall have no duty or
obligation to propose or approve, and may decline to propose or approve, the conduct by the
Partnership of any business free of any fiduciary duty or obligation whatsoever to the Partnership
or any Limited Partner and, in declining to so propose or approve, shall not be required to act in
good faith or pursuant to any other standard imposed by this Agreement, any other agreement
contemplated hereby (including the Administrative Services Agreement) or under the Delaware Act or
any other law, rule or regulation or at equity.
2.5 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 2.4 and for the protection and benefit of the
Partnership.
2.6 Power of Attorney.
(a) Each Limited Partner hereby constitutes and appoints the General Partner and, if a
Liquidator (other than the General Partner) shall have been selected pursuant to Section
12.3, the Liquidator, severally (and any successor to either thereof by merger,
transfer, assignment, election or otherwise) and each of their authorized officers and
attorneys-in-fact, as the case may be, 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
xxxxx, to:
2
(i) execute, swear to, acknowledge, deliver, file and record in the appropriate
public offices (A) all certificates, documents and other instruments (including this
Agreement and the Certificate of Limited Partnership and all amendments or
restatements hereof or thereof) that the General Partner or the Liquidator
determines to be 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 determines to be 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
conveyances and a certificate of cancellation) that the General Partner or the
Liquidator determines to be 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 IV, X, XI or XII; (E) all certificates,
documents and other instruments relating to the determination of the rights,
preferences and privileges of any class or series of Partnership Securities issued
pursuant to Section 5.6; and (F) all certificates, documents and other
instruments (including agreements and a certificate of merger) relating to a merger,
consolidation or conversion of the Partnership pursuant to Article XIV; and
(ii) execute, swear to, acknowledge, deliver, file and record all ballots,
consents, approvals, waivers, certificates, documents and other instruments that the
General Partner or the Liquidator determines to be necessary or appropriate to (A)
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 (B) effectuate the terms or intent of this Agreement;
provided, that when required by Section 13.3 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 and
the Liquidator may exercise the power of attorney made in this Section
2.6(a)(ii) only after the necessary vote, consent or approval of the Limited
Partners or of the Limited Partners of such class or series, as applicable.
Nothing contained in this Section 2.6(a) shall be construed as authorizing the
General Partner to amend this Agreement except in accordance with Article XIII 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, to the maximum extent permitted by law,
not be affected by the subsequent death, incompetency, disability, incapacity, dissolution,
bankruptcy or termination of any Limited Partner and the transfer of all or any portion of
such Limited Partner’s Partnership Interest and shall extend to such Limited Partner’s
heirs, successors, assigns and personal representatives. Each such Limited Partner 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, to
the maximum extent permitted by law, 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 shall
execute and deliver to the General Partner or the Liquidator, within 15 days after receipt
of the request therefor, such further designation, powers of attorney and other instruments
as the General Partner or the Liquidator may request in order to effectuate this Agreement
and the purposes of the Partnership.
2.7 Term. The term of 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 dissolution of the
Partnership in accordance with the provisions of Article XII. The existence of the
Partnership as a separate legal entity shall continue until the cancellation of the Certificate of
Limited Partnership as provided in the Delaware Act.
2.8 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, individually or
3
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 third party 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 or one or more third party nominees shall be held by the
General Partner or such third party nominee for the use and benefit of the Partnership in
accordance with the provisions of this Agreement; provided, however, that the General Partner shall
use 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, further, that, prior to the withdrawal or removal of the General Partner or as soon
thereafter as practicable, the General Partner shall use reasonable efforts to effect the transfer
to the Partnership of record title to all Partnership assets held by the General Partner, and,
prior to any such transfer, will provide for the use of such assets in a manner satisfactory to the
General Partner. 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 is
held.
2.9 Certain Undertakings Relating to the Separateness of the Partnership.
(a) Separateness Generally. The Partnership shall conduct its business and
operations separate and apart from those of any other Person, other than the General Partner
and the Partnership Group, in accordance with this Section 2.9.
(b) Separate Records. The Partnership shall (i) maintain its books and records
and its accounts separate from those of any other Person, other than the General Partner and
the Partnership Group, (ii) maintain its financial records, which will be used by it in its
ordinary course of business, showing its assets and liabilities separate and apart from
those of any other Person, other than the General Partner and the Partnership’s consolidated
Subsidiaries, (iii) not have its assets and/or liabilities included in a consolidated
financial statement of any Affiliate of the General Partner unless the General Partner shall
cause appropriate notation to be made on such Affiliate’s consolidated financial statements
to indicate the separateness of the Partnership and the General Partner and their assets and
liabilities from such Affiliate and the assets and liabilities of such Affiliate, and to
indicate that the assets and liabilities of the Partnership and the General Partner are not
available to satisfy the debts and other obligations of such Affiliate, and (iv) file its
own tax returns separate from those of any other Person, except to the extent that the
Partnership is treated as a “disregarded entity” for tax purposes or is not otherwise
required to file tax returns under applicable law or is required under applicable law to
file a tax return which is consolidated with another Person.
(c) Separate Assets. The Partnership shall not commingle or pool its funds or
other assets with those of any other Person, except its consolidated Subsidiaries and the
General Partner, and shall maintain its assets in a manner that is not costly or difficult
to segregate, ascertain or otherwise identify as separate from those of any other Person.
(d) Separate Name. The Partnership shall (i) conduct its business in its own
name or in the names of one or more of its Subsidiaries or the General Partner, (ii) use
separate stationery, invoices, and checks, (iii) correct any known misunderstanding
regarding its separate identity, and (iv) generally hold itself out as an entity separate
from any other Person, other than the General Partner and the Partnership’s Subsidiaries.
(e) Separate Credit. The Partnership (i) shall pay its obligations and
liabilities from its own funds (whether on hand or borrowed), (ii) shall maintain adequate
capital in light of its business operations, (iii) shall not pledge its assets for the
benefit of any other Person or guarantee or become obligated for the debts of any other
Person, except its Subsidiaries, (iv) shall not hold out its credit as being available to
satisfy the obligations or liabilities of any other Person, except its Subsidiaries, (v)
shall not acquire obligations or debt securities (other than those assumed and paid off on
the Closing Date pursuant to the Contribution Agreement) of EPCO or its Affiliates (other
than the members of the Partnership Group) including the MLP, the MLP General Partner or
their subsidiaries or TEPPCO, the TEPPCO General Partner or their subsidiaries, (vi) shall
not make loans, advances or capital contributions to any Person, except its Subsidiaries,
and (vii) shall use its commercially reasonable efforts to cause the operative documents
under which the Partnership or any of its Subsidiaries borrows money, is an issuer of debt
securities, or guarantees any such borrowing or issuance, to contain
4
provisions to the
effect that (A) the lenders or purchasers of debt securities, respectively, acknowledge that
they have advanced funds or purchased debt securities, respectively, in reliance upon the
separateness of the Partnership and the General Partner from each other and from any other
Person, including any Affiliate of the General Partner and (B) the Partnership and the
General Partner have assets and liabilities that are separate from those of other
Persons, including any Affiliate of the General Partner; provided, that, the Partnership may
engage in any transaction described in clauses (v) or (vi) of this Section
2.9(e) if prior Special Approval has been obtained for such transaction and either (y)
the Audit and Conflicts Committee has determined (by Special Approval) that the borrower or
recipient of the credit support is not then insolvent and will not be rendered insolvent as
a result of such transaction or (z) in the case of transactions described in clause
(v), such transaction is completed through a public auction or a National Securities
Exchange.
(f) Separate Formalities. The Partnership shall (i) observe all partnership
formalities and other formalities required by its organizational documents, the laws of the
jurisdiction of its formation, or other laws, rules, regulations and orders of governmental
authorities exercising jurisdiction over it, (ii) engage in transactions with EPCO and its
Affiliates (other than the General Partner or the members of the Partnership Group) or the
MLP, the MLP General Partner or their subsidiaries or TEPPCO, the TEPPCO General Partner or
their subsidiaries in conformity with the requirements of Section 7.9, and (iii)
subject to the terms of the Administrative Services Agreement, promptly pay, from its own
funds, and on a current basis, a fair and reasonable share of general and administrative
expenses, capital expenditures, and costs for shared services performed by EPCO or
Affiliates of EPCO (other than the General Partner or the members of the Partnership Group).
Each material contract between the Partnership, the General Partner or a member of the
Partnership Group, on the one hand, and EPCO or Affiliates of EPCO (other than the General
Partner or the members of the Partnership Group), on the other hand, shall be in writing.
(g) No Effect. Failure by the General Partner or the Partnership to comply
with any of the obligations set forth above shall not affect the status of the Partnership
as a separate legal entity, with its separate assets and separate liabilities. The General
Partner and the Partnership may be consolidated for financial reporting purposes with
Enterprise Products Partners L.P. and its subsidiaries; provided, however, that such
consolidation shall not affect the status of the Partnership as a separate legal entity with
its separate assets and separate liabilities.
5
ARTICLE III
Rights of Limited Partners
Rights of Limited Partners
3.1 Limitation of Liability. The Limited Partners shall have no liability under this Agreement except as expressly provided
in this Agreement or the Delaware Act.
3.2 Management of Business. No Limited Partner, in its capacity as such, shall 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. Any action taken by any Affiliate of the General Partner or any officer, director,
employee, member, manager, general partner, agent or trustee of the General Partner or any of its
Affiliates, or any officer, director, employee, member, manager, general partner, agent or trustee
of a Group Member, in its capacity as such, shall not be deemed to be participation in the control
of the business of the Partnership by a limited partner of the Partnership (within the meaning of
Section 17-303(a) of the Delaware Act) and shall not affect, impair or eliminate the limitations on
the liability of the Limited Partners under this Agreement.
3.3 Outside Activities of the Limited Partners. Subject to the provisions of Section 7.5 and the Administrative Services Agreement,
which shall continue to be applicable to the Persons referred to therein, regardless of whether
such Persons shall also be Limited Partners, any Limited Partner shall be entitled to and may have
business interests and engage in business activities in addition to those relating to the
Partnership, including business interests and activities in direct competition with the Partnership
Group. Neither the Partnership nor any of the other Partners shall have any rights by virtue of this Agreement in any
business ventures of any Limited Partner.
3.4 Rights of Limited Partners.
(a) In addition to other rights provided by this Agreement or by applicable law, and
except as limited by Section 3.4(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 written demand stating the purpose of such 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 its becoming available, to obtain a copy of the
Partnership’s federal, state and local income tax returns for each year;
(iii) to obtain a current list of the name and last known business, residence
or mailing address of each Partner;
(iv) to obtain a copy of this Agreement and the Certificate of Limited
Partnership and all amendments thereto, together with a copy of the executed copies
of all powers of attorney pursuant to which this Agreement, the Certificate of
Limited Partnership and all amendments thereto have been executed;
(v) to obtain true and full information regarding the amount of cash and a
description and statement of the Net Agreed Value of any other Capital Contribution
by each Partner and that 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, for such period of time as the General Partner deems
reasonable, (i) any information that the General Partner reasonably believes to be in the
nature of trade secrets or (ii) other information the disclosure of which the General
Partner in good faith believes (A) is not in the best interests of the Partnership Group,
(B) could damage the business of the Partnership Group or (C) that any Group Member is
required by law or by agreement with any third party to keep confidential (other than
agreements with Affiliates of the Partnership the primary purpose of which is to circumvent
the obligations set forth in this Section 3.4).
6
ARTICLE IV
Certificates; Record Holders; Transfer of Partnership Interests;
Redemption of Partnership Interests
Certificates; Record Holders; Transfer of Partnership Interests;
Redemption of Partnership Interests
4.1 Certificates. Upon the Partnership’s issuance of Common Units to any Person, the Partnership shall issue, upon
the request of such Person, one or more Certificates in the name of such Person evidencing the
number of such Common Units being so issued. In addition, (a) upon the General Partner’s request,
the Partnership shall issue to it one or more Certificates in the name of the General Partner
evidencing its interests in the Partnership and (b) upon the request of any Person owning any
Partnership Securities, the Partnership shall issue to such Person one or more Certificates
evidencing such Partnership Securities. Certificates shall be executed on behalf of the Partnership
by the Chairman of the Board, President or any Executive Vice President or Vice President and the
Secretary or any Assistant Secretary of the General Partner. No Unit Certificate shall be valid for
any purpose until it has been countersigned by the Transfer Agent; provided, however, that if the
General Partner elects to issue Units in global form, the Unit Certificates shall be valid upon receipt of a
certificate from the Transfer Agent certifying that the Units have been duly registered in
accordance with the directions of the Partnership.
4.2 Mutilated, Destroyed, Lost or Stolen Certificates.
(a) If any mutilated Certificate is surrendered to the Transfer Agent, the appropriate
officers of the General Partner on behalf of the Partnership shall execute, and the Transfer
Agent shall countersign and deliver in exchange therefor, a new Certificate evidencing the
same number and type of Partnership Securities as the Certificate so surrendered.
(b) The appropriate officers of the General Partner on behalf of the Partnership shall
execute and deliver, and the Transfer Agent shall countersign 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 General Partner has
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 General Partner a
bond, 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 to
indemnify the Partnership, the Partners, 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 fails to notify the General Partner within a reasonable period of time
after he has notice of the loss, destruction or theft of a Certificate, and a transfer of
the Limited Partner Interests represented by the Certificate is registered before the
Partnership, the General Partner or the Transfer Agent receives such notification, the
Limited Partner 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 new Certificate under this Section
4.2, 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 the fees and expenses of the Transfer Agent) reasonably connected therewith.
4.3 Record Holders. The Partnership shall be entitled to recognize the Record Holder as the Partner with respect to
any Partnership Interest and, accordingly, shall not be bound to recognize any equitable or other
claim to or
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interest in such Partnership Interest on the part of any other Person, regardless of
whether 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 such Partnership Interests are listed or admitted 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 Partnership Interests, as between the
Partnership on the one hand, and such other Persons on the other, such representative Person shall
be the Record Holder of such Partnership Interest.
4.4 Transfer Generally.
(a) The term “transfer,” when used in this Agreement with respect to a Partnership
Interest, shall be deemed to refer to a transaction (i) by which the General Partner assigns
its General Partner Interest to another Person and includes a sale, assignment, gift,
pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition by law or
otherwise or (ii) by which the holder of a Limited Partner Interest assigns such Limited
Partner Interest to another Person who is or becomes a Limited Partner, and includes a sale,
assignment, gift, exchange or any other disposition by law or otherwise, including any
transfer upon foreclosure of any pledge, encumbrance, hypothecation or mortgage.
(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 IV. Any transfer
or purported transfer of a Partnership Interest not made in accordance with this Article
IV shall be null and void.
(c) Nothing contained in this Agreement shall be construed to prevent a disposition by
any stockholder, member, partner or other owner of the General Partner of any or all of the
issued and outstanding equity interests of the General Partner.
4.5 Registration and Transfer of Limited Partner Interests.
(a) The General Partner shall keep or cause to be kept on behalf of the Partnership a
register in which, subject to such reasonable regulations as it may prescribe and subject to
the provisions of Section 4.5(b), the Partnership will provide for the registration
and transfer of Limited Partner Interests. The Transfer Agent is hereby appointed registrar
and transfer agent for the purpose of registering Common Units and transfers of such Common
Units as herein provided. The Partnership shall not recognize transfers of Certificates
evidencing Limited Partner Interests unless such transfers are effected in the manner
described in this Section 4.5. Upon surrender of a Certificate for registration of
transfer of any Limited Partner Interests evidenced by a Certificate, and subject to the
provisions of Section 4.5(b), the appropriate officers of the General Partner on
behalf of the Partnership shall execute and deliver, and in the case of Common Units, the
Transfer Agent shall 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 and type of Limited Partner Interests
as was evidenced by the Certificate so surrendered.
(b) Except as otherwise provided in Section 4.9, the General Partner shall not
recognize any transfer of Limited Partner Interests until the Certificates evidencing such
Limited Partner Interests are surrendered for registration of transfer. No charge shall be
imposed by the General Partner for such transfer; provided, that as a condition to the
issuance of any new Certificate under this Section 4.5, 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.
(c) Subject to (i) the foregoing provisions of this Section 4.5, (ii)
Section 4.3, (iii) Section 4.7, (iv) Section 4.8, (v) with respect
to any series of Limited Partner Interests, the provisions of any statement of designations
or amendment to this Agreement establishing such series, (vi) any contractual provisions
binding on any Limited Partner and (vii) provisions of applicable law including the
Securities Act, Limited Partnership Interests shall be freely transferable.
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4.6 Transfer of General Partner Interest.
(a) Subject to Section 4.6(c) below, prior to December 31, 2016, the General
Partner shall not transfer all or any part of its General Partner Interest to a Person
unless such transfer (i) has been approved by the prior written consent or vote of the
holders of at least a majority of the Outstanding Units (excluding any Common Units held by
the General Partner and its Affiliates) or (ii) is of all, but not less than all, of its
General Partner Interest to (A) an Affiliate (other than an individual) of the General
Partner or (B) another Person (other than an individual) in connection with the merger or
consolidation of the General Partner with or into another Person or the transfer by the
General Partner of all or substantially all of its assets to another Person (other than an
individual).
(b) Subject to Section 4.6(c) below, on or after December 31, 2016, the General
Partner may transfer all or any of its General Partner Interest without Unitholder approval.
(c) Notwithstanding anything contained in this Agreement to the contrary, no transfer
by the General Partner of all or any part of its General Partner Interest to another Person
or replacement of the General Partner pursuant to Section 10.2 shall be permitted
unless (i) the transferee or successor (as applicable) agrees to assume the rights and
duties of the General Partner under this Agreement and to be bound by the provisions of this
Agreement, (ii) the Partnership receives an Opinion of Counsel that such transfer or
replacement would not result in the loss of limited liability of any Limited Partner or
cause the Partnership to be treated as an association taxable as a corporation or otherwise
to be taxed as an entity for federal income tax purposes (to the extent not already so
treated or taxed) and (iii) such transferee or successor (as applicable) also agrees to
purchase all (or the appropriate portion thereof, if applicable) of the partnership interest
or membership interest of the General Partner as the general partner or managing member of
each other Group Member, as applicable (but excluding, without limitation for purposes of
clarification, any other interest or any interest owned by any other Affiliate controlling
or under common control with the General Partner), and (iv) for so long as any
Affiliate of Xxxxxx controls the General Partner, the organizational documents of the
owner(s) of all the General Partner Interest, together, provide for the establishment of an
“Audit and Conflicts Committee” to approve certain matters with respect to the General
Partner and the Partnership, the selection of “Independent Directors” as members of such
Audit and Conflicts Committee, and the submission of certain matters to the vote of such
Audit and Conflicts Committee or to the requirement of Special Approval upon similar terms
and conditions as set forth herein or in the limited liability company agreement of the
General Partner, as the same exists as of the date of this Agreement so as to provide the
Limited Partners and the General Partner with the same rights and obligations as are herein
contained. In the case of a transfer or replacement pursuant to and in compliance with this
Section 4.6, the transferee or successor (as applicable) shall, subject to
compliance with the terms of Section 10.2, be admitted to the Partnership as a
General Partner immediately prior to the transfer of the General Partner Interest, and the
business of the Partnership shall continue without dissolution.
4.7 Restrictions on Transfers.
(a) Except as provided in Section 4.7(c) below, but notwithstanding the other
provisions of this Article IV, no transfer of any Partnership Interests shall be
made if such transfer would (i) violate the then applicable federal or state securities laws
or rules and regulations of the Commission, any state securities commission or any other
governmental authority with jurisdiction over such transfer, (ii) terminate the existence or
qualification of the Partnership under the laws of the jurisdiction of its formation, or
(iii) cause the Partnership to be treated as an association taxable as a corporation or
otherwise to be taxed as an entity for federal income tax purposes (to the extent not
already so treated or taxed).
(b) The General Partner may impose restrictions on the transfer of Partnership
Interests if it reviews an Opinion of Counsel that determines that such restrictions are
necessary to avoid a significant risk of the Partnership becoming taxable as a corporation
or otherwise becoming taxable as an entity for federal income tax purposes. The General
Partner may impose such restrictions by amending this Agreement; provided, however, that any
amendment that would result in the delisting or suspension of trading of any class of
Limited Partner Interests on the principal National Securities Exchange on which such class
of Limited Partner Interests is then listed or admitted for trading must be approved, prior
to such amendment being effected, by the holders of at
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least a majority of the Outstanding
Units of such class (or if such class has not been so designated into Units, a majority of
the Outstanding Limited Partner Interests of such class).
(c) Nothing contained in this Article IV, or elsewhere in this Agreement, shall
preclude the settlement of any transactions involving Partnership Interests entered into
through the facilities of any National Securities Exchange on which such Partnership
Interests are listed for trading.
(d) Each certificate evidencing Partnership Interests shall bear a conspicuous legend
in substantially the following form:
THE HOLDER OF THIS SECURITY ACKNOWLEDGES FOR THE BENEFIT OF XXXXXX ENERGY PARTNERS L.P. THAT
THIS SECURITY MAY NOT BE SOLD, OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED 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 AUTHORITY WITH JURISDICTION OVER SUCH TRANSFER, (B) TERMINATE THE
EXISTENCE OR QUALIFICATION OF XXXXXX ENERGY PARTNERS L.P. UNDER THE LAWS OF THE STATE OF
DELAWARE, OR (C) CAUSE XXXXXX ENERGY PARTNERS L.P. TO BE TREATED AS AN ASSOCIATION TAXABLE
AS A CORPORATION OR OTHERWISE TO BE TAXED AS AN ENTITY FOR FEDERAL INCOME TAX PURPOSES (TO
THE EXTENT NOT ALREADY SO TREATED OR TAXED). DEP HOLDINGS, LLC, THE GENERAL PARTNER OF
XXXXXX ENERGY PARTNERS L.P., MAY IMPOSE ADDITIONAL RESTRICTIONS ON THE TRANSFER OF THIS
SECURITY IF IT RECEIVES AN OPINION OF COUNSEL THAT SUCH RESTRICTIONS ARE NECESSARY TO AVOID
A SIGNIFICANT RISK OF XXXXXX ENERGY PARTNERS L.P. BECOMING TAXABLE AS A CORPORATION OR
OTHERWISE BECOMING TAXABLE AS AN ENTITY FOR FEDERAL INCOME TAX PURPOSES. THE RESTRICTIONS
SET FORTH ABOVE SHALL NOT PRECLUDE THE SETTLEMENT OF ANY TRANSACTIONS INVOLVING THIS
SECURITY ENTERED INTO THROUGH THE FACILITIES OF ANY NATIONAL SECURITIES EXCHANGE ON WHICH
THIS SECURITY IS LISTED OR ADMITTED TO TRADING.
4.8 Citizenship Certificates; Non-citizen Assignees.
(a) If any Group Member is or becomes subject to any federal, state or local law or
regulation that the General Partner determines would create a substantial risk of
cancellation or forfeiture of any property in which the Group Member has an interest based
on the nationality, citizenship or other related status of a Limited Partner, the General
Partner may request any Limited Partner to furnish to the General Partner, within 30 days
after receipt of such request, an executed Citizenship Certification or such other
information concerning his nationality, citizenship or other related status (or, if the
Limited Partner is a nominee holding for the account of another Person, the nationality,
citizenship or other related status of such Person) as the General Partner may request. If a
Limited Partner 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
that a Limited Partner is not an Eligible Citizen, the Partnership Interests owned by such
Limited Partner shall be subject to redemption in accordance with the provisions of
Section 4.9. In addition, the General Partner may require that the status of any
such Limited Partner 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 Limited Partner Interests.
(b) The General Partner shall, in exercising voting rights in respect of Limited
Partner Interests held by it on behalf of Non-citizen Assignees, distribute the votes in the
same ratios as the votes of Partners (including the General Partner) in respect of Limited
Partner Interests 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 12.4 but shall be entitled to the
cash equivalent thereof, and the Partnership shall provide cash in exchange for an
assignment of the Non-citizen Assignee’s share of any
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distribution in kind. Such payment and
assignment shall be treated for Partnership purposes as a purchase by the Partnership from
the Non-citizen Assignee of his Limited Partner 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 that with respect
to any Limited Partner Interests of such Non-citizen Assignee not redeemed pursuant to
Section 4.9, such Non-citizen Assignee be admitted as a Limited Partner, and upon
approval of the General Partner, such Non-citizen Assignee shall be admitted as a
Limited Partner and shall no longer constitute a Non-citizen Assignee, and the General
Partner shall cease to be deemed to be the Limited Partner in respect of the Non-citizen
Assignee’s Limited Partner Interests.
4.9 Redemption of Partnership Interests of Non-citizen Assignees.
(a) If at any time a Limited Partner fails to furnish a Citizenship Certification or
other information requested within the 30-day period specified in Section 4.8(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 is not an Eligible Citizen,
the Partnership may, unless the Limited Partner establishes to the satisfaction of the
General Partner that such Limited Partner is an Eligible Citizen or has transferred his
Partnership Interests to a Person who is an Eligible Citizen and who furnishes a Citizenship
Certification to the General Partner prior to the date fixed for redemption as provided
below, redeem the Limited Partner Interest of such Limited Partner 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, 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 Interests, the
date fixed for redemption, the place of payment, that payment of the redemption
price will be made upon surrender of the Certificate evidencing the Redeemable
Interests and that on and after the date fixed for redemption no further allocations
or distributions to which the Limited Partner would otherwise be entitled in respect
of the Redeemable Interests will accrue or be made.
(ii) The aggregate redemption price for Redeemable Interests shall be an amount
equal to the Current Market Price (the date of determination of which shall be the
date fixed for redemption) of Partnership Interests of the class to be so redeemed
multiplied by the number of Partnership Interests of each such class included among
the Redeemable Interests. The redemption price shall be paid as determined by 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, at the place
specified in the notice of redemption, of the Certificate evidencing the Redeemable
Interests, duly endorsed in blank or accompanied by an assignment duly executed in
blank, the Limited Partner or his duly authorized representative shall be entitled
to receive the payment therefor.
(iv) After the redemption date, Redeemable Interests shall no longer constitute
issued and Outstanding Partnership Interests.
(b) The provisions of this Section 4.9 shall also be applicable to Partnership
Interests held by a Limited Partner as nominee of a Person determined to be other than an
Eligible Citizen.
(c) Nothing in this Section 4.9 shall prevent the recipient of a notice of
redemption from transferring his Partnership Interest 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
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the transferee of such Partnership Interest certifies to the satisfaction of the General Partner
in a Citizenship Certification 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.
ARTICLE V
Capital Contributions and Issuance of Partnership Interests
Capital Contributions and Issuance of Partnership Interests
5.1 Prior Contributions In connection with the formation of the Partnership, the General Partner made certain Capital
Contributions to the Partnership in exchange for a 2.0% General Partner interest in the Partnership
and was admitted as the General Partner of the Partnership, and Enterprise OLP made certain Capital
Contributions to the Partnership in exchange for a 98.0% Limited Partner Interest in the
Partnership and was admitted as a Limited Partner of the Partnership. As of the Closing Date, the
interest of the Organizational Limited Partner shall be redeemed as provided in the Contribution
Agreement, and the initial Capital Contribution of the Organizational Limited Partner shall be
refunded. Ninety-eight percent 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.
5.2 Contributions by the General Partner and its Affiliates.
(a) On the Closing Date and pursuant to the Contribution Agreement:
(i) the General Partner shall contribute to the Partnership, as a Capital
Contribution, all of its ownership interests in the Initial Operating Subsidiaries
in exchange for a continuation of its 2% General Partner Interest (representing
414,318 initial General Partner Units), subject to all of the rights, privileges and
duties of the General Partner under this Agreement, in accordance with the
Contribution Agreement; and
(ii) Enterprise OLP shall contribute to the Partnership, as a Capital
Contribution, ownership interests in the Initial Operating Subsidiaries
(representing 66% of the aggregate ownership interests in the Initial Operating
Subsidiaries less the percentage of such ownership interests being contributed by
the General Partner and its Affiliates in accordance with Section 5.2(a)(i), in
exchange for (A) 7,301,571 Common Units and (B) the right to receive approximately
$421.1 million as reimbursement for certain capital expenditures together with
additional cash for the contributed assets in accordance with the Contribution
Agreement.
(b) Upon the issuance of any additional Limited Partner Interests by the Partnership
(other than the Common Units issued in the Initial Offering and the Common Units issued
pursuant to the Over-Allotment Option), the General Partner may, in exchange for a
proportionate number of General Partner Units, make, but is not obligated to make, a
contribution in an amount equal to the product obtained by multiplying (i) the quotient
determined by dividing (A) the General Partner’s Percentage Interest by (B) 100 less the
General Partner’s Percentage Interest times (ii) the amount contributed to the Partnership
by the Limited Partners in exchange for such additional Limited Partner Interests. Except
as set forth in Sections 11.3(c) and 12.2(ii), the General Partner shall not
be obligated to make any additional Capital Contributions to the Partnership.
5.3 Contributions by the Underwriters and Redemption of Common Units if Over-Allotment Option
is Exercised.
(a) On the Closing Date and pursuant to the Underwriting Agreement, each Underwriter
shall contribute to the Partnership cash in an amount equal to the Issue Price per Initial
Common Unit, multiplied by the number of Common Units specified in the Underwriting
Agreement to be purchased by such Underwriter at the Issue Price per Initial Common Unit at
the Closing Date. In exchange for such Capital Contributions by the Underwriters, the
Partnership shall issue Common Units to each Underwriter on whose behalf such Capital
Contribution is made in an amount equal to the quotient obtained by dividing (i) such cash
contribution to the Partnership by or on behalf of such Underwriter by (ii) the Issue Price
per Initial Common Unit.
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(b) Upon the exercise of the Over-Allotment Option, each Underwriter shall contribute
to the Partnership cash in an amount equal to the Issue Price per Initial Common Unit,
multiplied by the number of Common Units to be purchased by such Underwriter at the Option
Closing Date. In exchange for such Capital Contributions by the Underwriters, the
Partnership shall issue Common Units to each Underwriter on whose behalf such Capital
Contribution was made in an amount equal to the quotient obtained by dividing (i) the cash
contributions to the Partnership by or on behalf of such Underwriter by (ii) the Issue Price
per Initial Common Unit. If the Underwriters exercise their Over-Allotment Option, the
Partnership shall use the net proceeds (after deducting underwriting discounts and
commissions) from such exercise to redeem from Enterprise OLP a number of Common Units equal
to the number of Common Units issued upon exercise of the Over-Allotment Option.
(c) Upon the issuance of Common Units to the Underwriters as provided in this
Section 5.3, each such Underwriter shall be deemed admitted as a Limited Partner
with respect to the Common Units acquired by it. Upon the further transfer of Common Units
to Persons acquiring the same from the Underwriters as contemplated by the Underwriting
Agreement, such transferees will be admitted as a successor Limited Partners as contemplated
by Section 10.1.
5.4 Interest and Withdrawal. No interest shall be paid by the Partnership on Capital Contributions. No Partner shall be
entitled to the withdrawal or return of its 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 expressly provided in this Agreement, no Partner shall have priority over any other Partner
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 agree within the meaning of Section
17-502(b) of the Delaware Act.
5.5 Capital Accounts.
(a) The Partnership shall maintain for each Partner (or a beneficial owner of
Partnership Interests 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) owning a Partnership Interest a separate
Capital Account with respect to such Partnership Interest 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 to the Partnership with respect to such
Partnership Interest pursuant to this Agreement and (ii) all items of Partnership income and
gain (including income and gain exempt from tax) computed in accordance with Section
5.5(b) and allocated with respect to such Partnership Interest pursuant to Section
6.1, and decreased by (A) the amount of cash or Net Agreed Value of all actual and
deemed distributions of cash or property made with respect to such Partnership Interest
pursuant to this Agreement and (B) all items of Partnership deduction and loss computed in
accordance with Section 5.5(b) and allocated with respect to such Partnership
Interest pursuant to Section 6.1.
(b) For purposes of computing the amount of any item of income, gain, loss or deduction
which is to be allocated pursuant to Article VI and is 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 any method of depreciation, cost recovery or amortization
used for that purpose), provided, that:
(i) Solely for purposes of this Section 5.5, the Partnership shall be
treated as owning directly its proportionate share (as determined by the General
Partner based upon the provisions of the applicable Group Member Agreement or
governing, organizational or similar documents) of all property owned by (x) any
other Group Member that is classified as a partnership for federal income tax
purposes and (y) any other partnership, limited liability company, unincorporated
business or other entity or arrangement that is classified as a partnership for
federal income tax purposes, of which a Group Member is, directly or indirectly, a
partner.
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(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 6.1.
(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. To the extent an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Section 734(b) or 743(b) of
the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m),
to be taken into account in determining Capital Accounts, the amount of such
adjustment in the Capital Accounts shall be treated as an item of gain or loss.
(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 5.5(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 method that the General Partner may adopt.
(vi) If the Partnership’s adjusted basis in a 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 6.1. Any restoration of such basis pursuant to Section
48(q)(2) of the Code shall, to the extent possible, be allocated in the same manner
to the Partners to whom such deemed deduction was allocated.
(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.
(d) (i) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), on an
issuance of additional Partnership Interests for cash or Contributed Property, the issuance
of Partnership Interests as consideration for the provision of services or the conversion of
the General Partner’s Purchased Interest to Common Units pursuant to Section
11.3(b), the Capital Account 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 6.1 in the same manner as any item of gain or loss actually
recognized during such period would have been allocated. In determining such Unrealized Gain
or Unrealized Loss, the aggregate cash amount and fair market value of all Partnership
assets (including
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cash or cash equivalents)
immediately prior to the issuance of additional Partnership Interests shall be
determined by the General Partner using such method of valuation as it may adopt; provided,
however, that the General Partner, in arriving at such valuation, must take fully into
account the fair market value of the Partnership Interests of all Partners at such time. The
General Partner shall allocate such aggregate value among the assets of the Partnership (in
such manner as it determines) to arrive at a fair market value for individual properties.
(ii) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f),
immediately prior to any actual or deemed 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 all 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 6.1 in the same manner as any item of gain or loss
actually recognized during such period would have been allocated. In determining
such Unrealized Gain or Unrealized Loss the aggregate cash amount and fair market
value of all Partnership assets (including cash or cash equivalents) immediately
prior to a distribution shall (A) in the case of an actual distribution that is not
made pursuant to Section 12.4 or in the case of a deemed contribution and/or
distribution occurring as a result of a termination of the Partnership pursuant to
Section 708 of the Code, be determined and allocated in the same manner as that
provided in Section 5.5(d)(i) or (B) in the case of a liquidating
distribution pursuant to Section 12.4, be determined and allocated by the
Liquidator using such method of valuation as it may adopt.
5.6 Issuances of Additional Partnership Securities.
(a) The Partnership may issue additional Partnership Securities and options, rights,
warrants and appreciation rights relating to the Partnership Securities for any Partnership
purpose at any time and from time to time to such Persons for such consideration and on such
terms and conditions as the General Partner shall determine, all without the approval of any
Limited Partners.
(b) Each additional Partnership Security authorized to be issued by the Partnership
pursuant to Section 5.6(a) may be issued in one or more classes, or one or more
series of any such classes, with such designations, preferences, rights, powers and duties
(which may be senior to existing classes and series of Partnership Securities), as shall be
fixed by the General Partner, including (i) the right to share in Partnership profits and
losses or items thereof; (ii) the right to share in Partnership distributions; (iii) the
rights upon dissolution and liquidation of the Partnership; (iv) whether, and the terms and
conditions upon which, the Partnership may or shall be required to redeem the Partnership
Security (including sinking fund provisions); (v) whether such Partnership Security is
issued with the privilege of conversion or exchange and, if so, the terms and conditions of
such conversion or exchange; (vi) the terms and conditions upon which each Partnership
Security will be issued, evidenced by certificates and assigned or transferred; (vii) the
method for determining the Percentage Interest as to such Partnership Security; and (viii)
the right, if any, of each such Partnership Security to vote on Partnership matters,
including matters relating to the relative rights, preferences and privileges of such
Partnership Security.
(c) The General Partner is hereby authorized and directed to take all actions that it
determines to be necessary or appropriate in connection with (i) each issuance of
Partnership Securities and options, rights, warrants and appreciation rights relating to
Partnership Securities pursuant to this Section 5.6, (ii) the conversion of the
General Partner Interest into Units pursuant to the terms of this Agreement, (iii) the
admission of additional Limited Partners and (iv) all additional issuances of Partnership
Securities. The General Partner shall determine the relative rights, powers and duties of
the holders of the Units or other Partnership Securities being so issued. The General
Partner shall do all things necessary to comply with the Delaware Act and is authorized and
directed to do all things that it determines to be necessary or appropriate in connection
with any future issuance of Partnership Securities or in connection with the conversion of
the General Partner Interest into Units pursuant to the terms of this Agreement, including
compliance with any statute, rule, regulation or
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guideline of any federal, state or other
governmental agency or any National Securities Exchange on which the Units or other
Partnership Securities are listed or admitted for trading.
(d) No fractional Units shall be issued by the Partnership.
5.7 Limited Preemptive Right. Except as provided in this Section 5.7 and in Section 5.2, and except as may be
provided as part of the terms of additional Partnership Securities issued pursuant to Section 5.6,
no Person shall have any preemptive, preferential or other similar right with respect to the
issuance of any Partnership Security, whether unissued, held in the treasury or hereafter created.
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 Partnership Securities from the Partnership whenever, and on
the same terms that, the Partnership issues Partnership Securities to Persons other than the
General Partner and its Affiliates, to the extent necessary to maintain the Percentage Interests
(other than the General Partner Interest) of the General Partner and its Affiliates equal to that
which existed immediately prior to the issuance of such Partnership Securities.
5.8 Splits and Combinations.
(a) Subject to Section 5.8(d), the Partnership may make a Pro Rata distribution
of Partnership Securities to all Record Holders or may effect a subdivision or combination
of Partnership Securities so long as, after any such event, each Partner shall have the same
Percentage Interest in the Partnership as before such event, and any amounts calculated on a
per Unit basis or stated as a number of Units are proportionately adjusted retroactive to
the beginning of the Partnership.
(b) Whenever such a distribution, subdivision or combination of Partnership Securities
is declared, the General Partner shall select a Record Date as of which the distribution,
subdivision or combination shall be effective and shall send notice thereof at least 20 days
prior to such Record Date to each Record Holder as of a date not less than 10 days prior to
the date of such notice. The General Partner also may cause a firm of independent public
accountants selected by it to calculate the number of Partnership Securities to be held by
each Record Holder after giving effect to such distribution, subdivision or combination. 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 distribution, subdivision or combination, the
Partnership may issue Certificates to the Record Holders of Partnership Securities as of the
applicable Record Date representing the new number of Partnership Securities held by such
Record Holders, or the General Partner may adopt such other procedures that it determines to
be necessary or appropriate to reflect such changes. If any such combination results in a
smaller total number of Partnership Securities Outstanding, the Partnership shall require,
as a condition to the delivery to a Record Holder of such new Certificate, the surrender of
any Certificate held by such Record Holder immediately prior to such Record Date.
(d) The Partnership shall not issue fractional Units upon any distribution, subdivision
or combination of Units. If a distribution, subdivision or combination of Units would result
in the issuance of fractional Units but for the provisions of Section 5.6(d) and
this Section 5.8(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).
5.9 Fully Paid and Non-Assessable Nature of Limited Partner Interests. All Limited Partner Interests issued pursuant to, and in accordance with the requirements of,
this Article V shall be fully paid and non-assessable Limited Partner Interests in the
Partnership, except as such non-assessability may be affected by Section 17-607 of the Delaware
Act.
ARTICLE VI
Allocations and Distributions
Allocations and Distributions
6.1 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
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(computed in accordance with Section 5.5(b)) shall be allocated among the Partners in each taxable year
(or portion thereof) as provided herein below.
(a) Net Income and Net Loss.
(i) Net Income. After giving effect to the special allocations set forth in
Section 6.1(c), Net Income for each taxable year and all items of income,
gain, loss and deduction taken into account in computing Net Income for such taxable
year shall be allocated to the Partners in accordance with their respective
Percentage Interests.
(ii) Net Losses. After giving effect to the special allocations set forth in
Section 6.1(c), Net Losses for each taxable period and all items of income,
gain, loss and deduction taken into account in computing Net Losses for such taxable
period shall be allocated to the Partners in accordance with their respective
Percentage Interests; provided, that Net Losses shall not be allocated pursuant to
this Section 6.1(a) to the extent that such allocation would cause any
Partner 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), instead any such Net Losses shall be allocated to Partners with positive
Adjusted Capital Accounts in accordance with their Percentage Interests until such
positive Adjusted Capital Accounts are reduced to zero, and thereafter to the
General Partner.
(b) Net Termination Gains and Losses. After giving effect to the special allocations
set forth in Section 6.1(c), 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 6.1(b) shall be made after
Capital Account balances have been adjusted by all other allocations provided under this
Section 6.1 and after all distributions of Available Cash provided under Section 6.3 have
been made; provided, however, that solely for purposes of this Section 6.1(b), Capital
Accounts shall not be adjusted for distributions made pursuant to Section 12.4.
(i) If a Net Termination Gain is recognized (or deemed recognized pursuant to
Section 5.5(d)), such Net Termination Gain shall be allocated among the Partners in
the following manner (and the 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 Capital
Account, in the proportion that such deficit balance bears to the total
deficit balances in the Capital Accounts of all Partners, until each such
Partner has been allocated Net Termination Gain equal to any such deficit
balance in its Capital Account; and
B. Second, 100% to all Partners in accordance with their Percentage
Interests.
(ii) If a Net Termination Loss is recognized (or deemed recognized pursuant to
Section 5.5(d)), such Net Termination Loss shall be allocated among the Partners in
the following manner:
A. First, 100% to all Partners in accordance with their Percentage
Interests, until the Capital Account in respect of each Common Unit then
Outstanding has been reduced to zero; and
B. Second, the balance, if any, 100% to the General Partner.
(c) Special Allocations. Notwithstanding any other provision of this Section
6.1, the following special allocations shall be made for such taxable period:
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(i) Partnership Minimum Gain Chargeback. Notwithstanding any other provision of
this Section 6.1, 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 provision. For purposes of this
Section 6.1(c), 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 6.1(c) with respect to such taxable period (other than an allocation
pursuant to Sections 6.1(c)(v) and 6.1(c)(vi)). This Section
6.1(c)(i) is intended to comply with the Partnership Minimum Gain chargeback
requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted
consistently therewith.
(ii) Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the
other provisions of this Section 6.1 (other than Section 6.1(c)(i)),
except as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net
decrease in Partner Nonrecourse Debt Minimum Gain during any Partnership taxable
period, any Partner with a share of Partner Nonrecourse Debt Minimum Gain 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
6.1(c), 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 6.1(c), other
than Section 6.1(c)(i) and other than an allocation pursuant to Sections
6.1(c)(v) and 6.1(c)(vi), with respect to such taxable period. This
Section 6.1(c)(ii) is intended to comply with the chargeback of items of
income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall
be interpreted consistently therewith.
(iii) Qualified Income Offset. In the event any Partner unexpectedly receives
any adjustments, allocations or distributions described in Treasury Regulation
Sections 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 specially
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 6.1(c)(i) or (ii).
(iv) Gross Income Allocations. In the event any Partner has a deficit balance
in its Capital Account at the end of any Partnership taxable period in excess of the
sum of (A) the amount such Partner is required to restore pursuant to the provisions
of this Agreement and (B) the amount such Partner is deemed obligated to restore
pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Partner
shall be specially 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 6.1(c)(iv) shall be made only if and to the extent that such
Partner would have a deficit balance in its Capital Account as adjusted after all
other allocations provided for in this Section 6.1 have been tentatively
made as if this Section 6.1(c)(iv) were not in this Agreement.
(v) Nonrecourse Deductions. Nonrecourse Deductions for any taxable period
shall be allocated to the Partners in accordance with their respective Percentage
Interests. If the General Partner determines that the Partnership’s Nonrecourse
Deductions should 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 other Partners, to
revise the prescribed ratio to the numerically closest ratio that 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 with respect to the Partner Nonrecourse Debt to which such Partner
Nonrecourse Deductions are attributable in
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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.
(vii) 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 in
accordance with their respective Percentage Interests.
(viii) Code Section 754 Adjustments. To the extent an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Section 734(b) or 743(b) of
the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m),
to be taken into account in determining Capital Accounts, the amount of such
adjustment to the Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment decreases
such basis), and such item of gain or loss shall be specially allocated to the
Partners in a manner consistent with the manner in which their Capital Accounts are
required to be adjusted pursuant to such Section of the Treasury Regulations.
(ix) Curative Allocation.
A. Notwithstanding any other provision of this Section 6.1,
other than the Required Allocations, the Required Allocations shall be taken
into account in making the Agreed Allocations so that, to the extent
possible, the net amount of items of income, gain, loss and deduction
allocated to each Partner pursuant to the Required Allocations and the
Agreed Allocations, together, shall be equal to the net amount of such items
that would have been allocated to each such Partner under the Agreed
Allocations had the Required Allocations and the related Curative Allocation
not otherwise been provided in this Section 6.1. Notwithstanding the
preceding sentence, Required Allocations relating to (1) Nonrecourse
Deductions shall not be taken into account except to the extent that there
has been a decrease in Partnership Minimum Gain and (2) Partner Nonrecourse
Deductions shall not be taken into account except to the extent that there
has been a decrease in Partner Nonrecourse Debt Minimum Gain. Allocations
pursuant to this Section 6.1(c)(ix)(A) shall only be made with
respect to Required Allocations to the extent the General Partner determines
that such allocations will otherwise be inconsistent with the economic
agreement among the Partners. Further, allocations pursuant to this
Section 6.1(c)(ix)(A) shall be deferred with respect to allocations
pursuant to clauses (1) and (2) hereof to the extent the General
Partner determines that such allocations are likely to be offset by
subsequent Required Allocations.
B. The General Partner shall, with respect to each taxable period, (1)
apply the provisions of Section 6.1(c)(ix)(A) in whatever order is
most likely to minimize the economic distortions that might otherwise result
from the Required Allocations, and (2) divide all allocations pursuant to
Section 6.1(c)(ix)(A) among the Partners in a manner that is likely
to minimize such economic distortions.
6.2 Allocations for Tax Purposes.
(a) Except as otherwise provided herein, for federal income tax purposes, each item of
income, gain, loss and deduction 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 6.1.
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(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) 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 6.1.
(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
5.5(d)(i) or 5.5(d)(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 6.2(b)(i)(A); and (B) 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 6.1.
(iii) The General Partner shall apply the principles of Treasury Regulation
Section 1.704-3(d) to eliminate Book-Tax Disparities, except as otherwise determined
by the General Partner with respect to goodwill.
(c) For the proper administration of the Partnership and for the preservation of
uniformity of the Limited Partner Interests (or any class or classes thereof), the General
Partner shall (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 gross income) or deductions; and (iii)
amend the provisions of this Agreement as appropriate (A) to reflect the proposal or
promulgation of Treasury Regulations under Section 704(b) or Section 704(c) of the Code or
(B) otherwise to preserve or achieve uniformity of the Limited Partner Interests (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
6.2(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 Limited Partner
Interests issued and Outstanding or the Partnership, and if such allocations are consistent
with the principles of Section 704 of the Code.
(d) The General Partner may determine to depreciate or amortize 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 or amortization method and useful life
applied to the Partnership’s common basis of such property, despite any inconsistency of
such approach with Treasury Regulation Section 1.167(c)-l(a)(6), Treasury Regulation Section
1.197-2(g)(3), the legislative history of Section 743 of the Code or any successor
regulations thereto. If the General Partner determines that such reporting position cannot
reasonably be taken, the General Partner may adopt depreciation and amortization conventions
under which all purchasers acquiring Limited Partner Interests in the same month would
receive depreciation and amortization deductions, 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
depreciation and amortization conventions to preserve the uniformity of the
intrinsic tax characteristics of any Limited Partner Interests so long as such
conventions would not have a material adverse effect on the Limited Partners or the Record
Holders of any class or classes of Limited Partner Interests.
(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 6.2, be characterized as
Recapture Income in the same proportions and to the same extent as such
20
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 (in the manner determined by the General Partner) 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, 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 opening of the principal National Securities Exchange on which the Units are then traded
on the first Business Day of each month; provided, however, that 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 or the expiration of the Over-Allotment Option occurs shall be allocated to the
Partners as of the opening of the National Securities Exchange on which the Units are then
traded on the first Business Day of the next succeeding 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
National Securities Exchange on which the Units are then traded 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 to the
extent permitted or required by Section 706 of the Code and the regulations or rulings
promulgated thereunder.
(h) Allocations that would otherwise be made to a Limited Partner under the provisions
of this Article VI shall instead be made to the beneficial owner of Limited Partner
Interests 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 determined by the General Partner.
6.3 Requirement and Characterization of Distributions; Distributions to Record Holders.
(a) Within 45 days following the end of each Quarter commencing with the Quarter ending
on March 31, 2007, an amount equal to 100% of Available Cash with respect to such Quarter
shall, subject to Section 17-607 of the Delaware Act, be distributed in accordance with this
Article VI by the Partnership to the Partners in accordance with their respective
Percentage Interests as of the Record Date selected by the General Partner. All
distributions required to be made under this Agreement shall be made subject to Section
17-607 of the Delaware Act.
(b) Notwithstanding Section 6.3(a), in the event of the dissolution and
liquidation of the Partnership, all receipts received during or after the Quarter in which
the Liquidation Date occurs shall be applied and distributed solely in accordance with, and
subject to the terms and conditions of, Section 12.4.
(c) The General Partner may treat taxes paid by the Partnership on behalf of, or
amounts withheld with respect to, all or less than all of the Partners, as a distribution of
Available Cash to such Partners.
(d) Each distribution in respect of a Partnership Interest shall be paid by the
Partnership, directly or through the Transfer Agent or through any other Person or agent,
only to the Record Holder of such Partnership Interest as of the Record Date set for such
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.
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ARTICLE VII
Management and Operation of Business
Management and Operation of Business
7.1 Management.
(a) The General Partner shall conduct, direct and manage 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 shall have any 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 that are granted to the General
Partner under any other provision of this Agreement, the General Partner, subject to
Sections 2.9, 7.3 and 12.9, shall have full power and authority to
do all things and on such terms as it determines to be necessary or appropriate to conduct
the business of the Partnership, to exercise all powers set forth in Section 2.5 and
to effectuate the purposes set forth in Section 2.4, including the following:
(i) 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, including indebtedness that
is convertible into Partnership Securities, and the incurring of any other
obligations;
(ii) 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;
(iii) 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 (iii) being subject, however, to any prior
approval that may be required by Section 7.3 and Article XIV);
(iv) the use of the assets of the Partnership (including cash on hand) for any
purpose consistent with the terms of this Agreement, including the financing of the
conduct of the operations of the Partnership Group; subject to Section
7.6(a), the lending of funds to other Persons (including other Group Members);
the repayment or guarantee of obligations of other Group Members and the making of
capital contributions to any Group Member;
(v) the negotiation, execution and performance of any contracts, conveyances or
other instruments (including 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);
(vi) the distribution of Partnership cash;
(vii) the selection and dismissal of employees (including 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;
(viii) the maintenance of such insurance for the benefit of the Partnership
Group, the Partners and the Indemnitees as it deems necessary or appropriate (if
such insurance is not maintained pursuant to the Administrative Services Agreement);
(ix) the formation of, or acquisition of an interest in, and the contribution
of cash or property and the making of loans to, any further limited or general
partnerships, joint ventures, limited
22
liability companies, corporations or other relationships (including the
acquisition of interests in, and the contributions of cash or property to, the
Operating Partnership from time to time) subject to the restrictions set forth in
Sections 2.4 and 2.9;
(x) the control of any matters affecting the rights and obligations of the
Partnership, including the bringing and defending of actions at law or in equity and
otherwise engaging in the conduct of litigation, arbitration or mediation and the
incurring of legal expense and the settlement of claims and litigation;
(xi) the indemnification of any Person against liabilities and contingencies to
the extent permitted by law;
(xii) the entering into of listing agreements with any National Securities
Exchange and the delisting of some or all of the Limited Partner Interests from, or
requesting that trading be suspended on, any such exchange (subject to any prior
approval that may be required under Section 4.7);
(xiii) the purchase, sale or other acquisition or disposition of Partnership
Securities, or the issuance of options, rights, warrants and appreciation rights
relating to Partnership Securities;
(xiv) the undertaking of any action in connection with the Partnership’s
ownership or operation of any Group Member, including exercising on behalf and for
the benefit of the Partnership, the Partnership’s rights as the sole member of the
Operating General Partner; and
(xv) the entering into of agreements with any of its Affiliates to render
services to a Group Member or to itself in the discharge of its duties as General
Partner of the Partnership, including the Administrative Services Agreement and any
amendments thereto.
(b) Notwithstanding any other provision of this Agreement, any Group Member Agreement,
the Delaware Act or any applicable law, rule or regulation, each of the Partners and each
other Person who may acquire an interest in Partnership Securities hereby (i) approves,
ratifies and confirms the execution, delivery and performance by the parties thereto of this
Agreement, the Underwriting Agreement, the Contribution Agreement, the Administrative
Services Agreement, any Group Member Agreement of any other Group Member and the other
agreements described in or filed as a part of the Registration Statement that are related to
the transactions contemplated by the Registration Statement; (ii) agrees that the General
Partner (on its own or through any officer of the Partnership) 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 or contemplated by the
Registration Statement on behalf of the Partnership without any further act, approval or
vote of the Partners or the other Persons who may acquire an interest in Partnership
Securities; and (iii) agrees that the execution, delivery or performance by the General
Partner, any Group Member or any Affiliate of any of them, of this Agreement or any
agreement authorized or permitted under this Agreement (including the exercise by the
General Partner or any Affiliate of the General Partner of the rights accorded pursuant to
Article XV), shall not constitute a breach by the General Partner of any duty that
the General Partner may owe the Partnership or the Limited Partners or any other Persons
under this Agreement (or any other agreements) or of any duty stated or implied by law or
equity.
7.2 Certificate of Limited Partnership. The General Partner has caused the Certificate of Limited Partnership to be filed with the
Secretary of State of the State of Delaware as required by the Delaware Act and shall use all
reasonable efforts to cause to be filed such other certificates or documents that the General
Partner determines to be 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 the General Partner determines such action to be
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 or other entity in which the limited partners have limited liability)
under the laws of the State of Delaware or of
any other state in which the
23
Partnership may elect to do business or own property. Subject to the
terms of Section 3.4(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.
7.3 Restrictions on General Partner’s Authority. Except as provided in Articles XII and XIV, the General Partner may not sell,
exchange or otherwise dispose of, or approve on behalf of the Partnership the sale, exchange or
other disposition of, all or substantially all of the assets of the Partnership Group, taken as a
whole, or interests owned directly or indirectly by the Partnership, taken as a whole, in a single
transaction or a series of related transactions (including by way of merger, consolidation or other
combination or sale of ownership interests of the Partnership’s Subsidiaries), without the approval
of holders of a majority of Outstanding Units and Special Approval; 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 assets of the
Partnership Group and shall not apply to any forced sale of any or all of the assets of the
Partnership Group pursuant to the foreclosure of, or other realization upon, any such encumbrance.
Without the approval of holders of a majority of Outstanding Units, the General Partner shall not,
on behalf of the Partnership, except as permitted under Sections 4.6, 11.1 and
11.2, elect or cause the Partnership to elect a successor general partner of the
Partnership.
7.4 Reimbursement of the General Partner.
(a) Except as provided in this Section 7.4 and elsewhere in this Agreement,
none of the General Partner or its Affiliates shall be compensated for its services as a
general partner or managing member of any Group Member.
(b) Subject to any applicable limitations contained in the Administrative Services
Agreement, the General Partner or EPCO, without duplication, shall be reimbursed on a
monthly basis, or such other basis as the General Partner may determine, for (i) all direct
and indirect expenses it incurs or payments it makes on behalf of the Partnership (including
amounts incurred by EPCO under the Administrative Services Agreement and including salary,
bonus, incentive compensation and other amounts paid to any Person, including Affiliates of
the General Partner, to perform services for the Partnership or the General Partner in the
discharge of its duties to the Partnership), and (ii) all other expenses allocable to the
Partnership or otherwise incurred in connection with operating the Partnership’s business
(including expenses allocated to the General Partner by its Affiliates). The General Partner
shall determine the expenses that are allocable to the Partnership. Reimbursements pursuant
to this Section 7.4 shall be in addition to any reimbursement to the General Partner
as a result of indemnification pursuant to Section 7.7.
(c) The General Partner, without the approval of the Limited Partners (who shall have
no right to vote in respect thereof), may propose and adopt on behalf of the Partnership
employee benefit plans, employee programs and employee practices (including plans, programs
and practices involving the issuance of Partnership Securities or options to purchase or
rights, warrants or appreciation rights relating to Partnership Securities), or cause the
Partnership to issue Partnership Securities in connection with, or pursuant to, any employee
benefit plan, employee program or employee practice maintained or sponsored by the General
Partner or any of its Affiliates, in each case for the benefit of employees of the General
Partner, any Group Member or any Affiliate, or any of them, in respect of services
performed, directly or indirectly, for the benefit of the Partnership Group. The Partnership
agrees to issue and sell to the General Partner or any of its Affiliates, or directly to the
applicable employees, any Partnership Securities that the General Partner or such Affiliate
is obligated to provide to any employees pursuant to any such employee benefit plans,
employee programs or employee practices. Expenses incurred by the General Partner or such
Affiliate in connection with any such plans, programs and practices (including the net cost
to the General Partner or such Affiliate of Partnership Securities purchased by the General
Partner or such Affiliate (on behalf of the applicable employees) from the Partnership to
fulfill options or awards under such plans, programs and practices) shall be reimbursed in
accordance with Section 7.4(b). Any and all obligations of the General Partner under
any employee benefit plans, employee programs or employee practices adopted by the General
Partner as permitted by this Section 7.4(c) shall constitute obligations of the
General Partner hereunder and shall be assumed
by any successor General Partner approved pursuant to Section 11.1 or
11.2 or the transferee of or successor to all of the General Partner’s Partnership
Interest as the General Partner in the Partnership pursuant to Section 4.6.
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7.5 Outside Activities.
(a) After the Closing Date, the General Partner, for so long as it is the general
partner of the Partnership (i) agrees that its sole business will be to act as the general
partner of the Partnership and to undertake activities that are ancillary or related thereto
(including being a limited partner in the Partnership), and (ii) shall not engage in any
business or activity or incur any debts or liabilities except in connection with or
incidental to (A) its performance as general partner or managing member of one or more Group
Members or as described in or contemplated by the Registration Statement or (B) the
acquiring, owning or disposing of debt or equity securities in any Group Member.
(b) Except as specifically restricted by the Administrative Services Agreement, each
Indemnitee (other than the General Partner) shall have the right to engage in businesses of
every type and description and other activities for profit and to engage in and possess an
interest in other business ventures of any and every type or description, whether in
businesses engaged in or anticipated to be engaged in by any Group Member, independently or
with others, including business interests and activities in direct competition with the
business and activities of any Group Member, and none of the same shall constitute a breach
of this Agreement or any duty expressed or implied by law or equity to any Group Member or
any Partner. None of any Group Member, any Limited Partner nor any other Person shall have
any rights by virtue of this Agreement, any Group Member Agreement or the partnership
relationship established hereby or thereby in any business ventures of any Indemnitee.
(c) Subject to the terms of the Administrative Services Agreement and Section
7.5(d), but otherwise notwithstanding anything to the contrary in this Agreement, (i)
the engaging in competitive activities by any Indemnitees (other than the General Partner)
in accordance with the provisions of this Section 7.5 is hereby approved by the
Partnership and all Partners, (ii) it shall be deemed not to be a breach of any fiduciary
duty or any other obligation of any type whatsoever of any Indemnitee for the Indemnitees
(other than the General Partner) to engage in such business interests and activities in
preference to or to the exclusion of the Partnership and (iii) the General Partner and the
Indemnitees shall have no obligation hereunder or as a result of any duty expressed or
implied by law or equity to present business opportunities to the Partnership.
(d) Notwithstanding anything to the contrary in this Agreement or in the Administrative
Services Agreement (including provisions relating to opportunities that may be offered by
certain Indemnitees in their discretion), the doctrine of corporate opportunity or any
analogous doctrine shall not apply to any Indemnitee (including the General Partner), and no
Indemnitee (including the General Partner) who acquires knowledge of a potential
transaction, agreement, arrangement or other matter that may be an opportunity for the
Partnership, shall have any duty to communicate or offer such opportunity to the
Partnership, and such Indemnitee (including the General Partner) shall not be liable to the
Partnership, to any Limited Partner or any other Person for breach of any fiduciary or other
duty by reason of the fact that such Indemnitee (including the General Partner) pursues or
acquires for itself, directs such opportunity to another Person or does not communicate such
opportunity or information to the Partnership; provided that such Indemnitee does not
pursue, acquire or direct such opportunity as a result of or using
confidential or proprietary information provided by or on behalf of the Partnership to such Indemnitee,
other than in accordance with the Administrative Services Agreement.
(e) The General Partner and each of its Affiliates may acquire Units or other
Partnership Securities in addition to those acquired on the Closing Date and, except as
otherwise provided in this Agreement, shall be entitled to exercise, at their option, all
rights of the General Partner or a Limited Partner, as applicable, relating to such Units or
other Partnership Securities. For purposes of this Section 7.5(e), the term
“Affiliates” when used with respect to the General Partner shall not include any Group
Member.
7.6 Loans from the General Partner; Loans or Contributions from the Partnership; Contracts
with Affiliates; Certain Restrictions on the General Partner.
(a) The General Partner or any of its Affiliates may, but shall be under no obligation
to, lend to any Group Member, and any Group Member may borrow from the General Partner or
any of its Affiliates, funds needed or desired by the Group Member for such periods of time
and in such amounts as the General Partner
25
may determine; provided, however, that in any
such case the lending party may not charge the borrowing party interest at a rate greater
than the rate that would be charged to the borrowing party or impose terms less favorable to
the borrowing party than would be charged or imposed on the borrowing party by unrelated
lenders on comparable loans made on an arm’s-length basis (without reference to the lending
party’s financial abilities or guarantees), all as determined by the General Partner. Any
loan made by the General Partner or its Affiliate to a Group Member the terms of which are
approved by Special Approval shall be deemed to meet the requirements of this Section
7.6(a). The borrowing party shall reimburse the lending party for any costs (other than
any additional interest costs) incurred by the lending party in connection with the
borrowing of such funds. For purposes of this Section 7.6(a) and Section
7.6(b), the term ‘‘Group Member’’ shall include any Affiliate of a Group Member that is
controlled by the Group Member.
(b) The Partnership may lend or contribute to any Group Member, and any Group Member
may borrow from the Partnership, funds on terms and conditions determined by the General
Partner. No Group Member may lend funds to the General Partner or any of its Affiliates
(other than another Group Member).
(c) The General Partner may itself, or may enter into an agreement, in addition to the
Administrative Services Agreement, with any of its Affiliates to, render services to a Group
Member or to the General Partner in the discharge of its duties as general partner of the
Partnership. Any services rendered to the Group Member by the General Partner or any of its
Affiliates shall be on terms that are fair and reasonable to the Group Member; provided,
however, that the requirements of this Section 7.6(c) shall be deemed satisfied as
to (i) any transaction approved by Special Approval, (ii) any transaction, the terms of
which are no less favorable to the Group Member than those generally being provided to or
available from unrelated third parties, or (iii) any transaction that, taking into account
the totality of the relationship between the parties involved (including other transactions
that may be particularly favorable or advantageous to the Group Member), is equitable to the
Group Member. The provisions of Section 7.4 shall apply to the rendering of
services described in this Section 7.6(c).
(d) The Partnership may transfer, and cause other Group Members to transfer, assets to
joint ventures, other partnerships, corporations, limited liability companies 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, a Group Member, directly or
indirectly, except pursuant to transactions that are fair and reasonable to the Group
Member; provided, however, that the requirements of this Section 7.6(e) shall be
deemed to be satisfied as to (i) the transactions effected pursuant to Sections 5.2
and 5.3 and any other transactions described in or contemplated by the Registration
Statement, (ii) any transaction approved by Special Approval, (iii) any transaction, the
terms of which are objectively demonstrable to be no less favorable to the Group Member than
those generally being provided to or available from unrelated third parties, or (iv) any
transaction that, taking into account the totality of the relationship between the parties
involved (including other transactions that may be particularly favorable or advantageous to
the Partnership), is equitable to the Group Member. With respect to any contribution of
assets to the Partnership in exchange for Partnership Securities, the Audit and Conflicts
Committee, in determining (in connection with Special Approval) whether the appropriate
number of Partnership Securities are being issued, may take into account, among other
things, the fair market value of the assets, the liquidated and contingent liabilities
assumed, the tax basis in the assets, the extent to which tax-only allocations to the
transferor will protect the existing partners of the Partnership against a low tax basis,
and such other factors as the Audit and Conflicts Committee determines to be relevant under
the circumstances.
(f) The General Partner and its Affiliates will have no obligation to permit any Group
Member to use any facilities or assets 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 on the part of the General Partner or its Affiliates to enter into such
contracts.
26
(g) Without limitation of Sections 7.6(a) through 7.6(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.
7.7 Indemnification.
(a) To the fullest extent permitted by law but subject to the limitations expressly
provided in this Agreement, all Indemnitees shall be indemnified and held harmless by the
Partnership from and against any and all losses, claims, damages, liabilities, joint or
several, expenses (including legal fees and expenses), judgments, fines, penalties,
interest, settlements or 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 an Indemnitee; provided, that the Indemnitee shall not be
indemnified and held harmless if there has been a final and non-appealable judgment entered
by a court of competent jurisdiction determining that, in respect of the matter for which
the Indemnitee is seeking indemnification pursuant to this Section 7.7, the
Indemnitee acted in bad faith or engaged in fraud, willful misconduct, or in the case of a
criminal matter, acted with knowledge that the Indemnitee’s conduct was unlawful; provided,
further, no indemnification pursuant to this Section 7.7 shall be available to the
General Partner or its Affiliates (other than a Group Member) with respect to its or their
obligations incurred pursuant to the Underwriting Agreement, the Omnibus Agreement or the
Contribution Agreement (other than obligations incurred by the General Partner on behalf of
the Partnership). Any indemnification pursuant to this Section 7.7 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 legal fees and
expenses) incurred by an Indemnitee who is indemnified pursuant to Section 7.7(a) in
defending any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Partnership prior to a determination that the Indemnitee is not entitled to
be indemnified, upon receipt by the Partnership of any 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 7.7.
(c) The indemnification provided by this Section 7.7 shall be in addition to
any other rights to which an Indemnitee may be entitled under any agreement, pursuant to any
vote of the holders of Outstanding Units entitled to vote on such matter, as a matter of law
or otherwise, both as to actions in the Indemnitee’s capacity as an Indemnitee, and as to
actions in any other capacity (including any capacity under the Underwriting Agreement), and
shall continue as to an Indemnitee who has ceased to serve in such capacity and shall inure
to the benefit of the heirs, successors, assigns and administrators of the Indemnitee.
(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, its Affiliates 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 or such Person’s activities on behalf of the Partnership,
regardless of whether the Partnership would have the power to indemnify such Person against
such liability under the provisions of this Agreement.
(e) For purposes of this Section 7.7, 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 shall constitute “fines” within the meaning of Section 7.7(a); and
action taken or omitted by the Indemnitee with respect to any employee benefit plan in the
performance of its duties for a purpose reasonably believed by it to be in the best interest
of the participants and beneficiaries of the plan shall be deemed to be for a purpose that
is in the best interest of the Partnership.
27
(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 7.7 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 7.7 are for the benefit of the Indemnitees,
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 7.7 or any 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 obligations of the
Partnership to indemnify any such Indemnitee under and in accordance with the provisions of
this Section 7.7 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, and provided such Person became an Indemnitee hereunder prior to such
amendment, modification or repeal.
(j) THE PROVISIONS OF THE INDEMNIFICATION PROVIDED IN THIS SECTION 7.7 ARE
INTENDED BY THE PARTIES TO APPLY EVEN IF SUCH PROVISIONS HAVE THE EFFECT OF EXCULPATING THE
INDEMNITEE FROM LEGAL RESPONSIBILITY FOR THE CONSEQUENCES OF SUCH PERSON’S NEGLIGENCE, FAULT
OR OTHER CONDUCT.
7.8 Liability of Indemnitees.
(a) Notwithstanding anything to the contrary set forth in this Agreement, no Indemnitee
shall be liable for monetary damages to the Partnership, the Limited Partners or any other
Persons who have acquired interests in Partnership Securities, for losses sustained or
liabilities incurred as a result of any act or omission of an Indemnitee unless there has
been a final and non-appealable judgment entered by a court of competent jurisdiction
determining that, in respect of the matter in question, the Indemnitee acted in bad faith or
engaged in fraud, willful misconduct or, in the case of a criminal matter, acted with
knowledge that the Indemnitee’s conduct was criminal.
(b) Subject to its obligations and duties as General Partner set forth in Section
7.1(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 7.8 or any provision
hereof shall be prospective only and shall not in any way affect the limitations on the
liability of the Indemnitees under this Section 7.8 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.
7.9 Resolution of Conflicts of Interest; Standard of Conduct and Modification of Duties.
(a) Unless otherwise expressly provided in this Agreement or any Group Member
Agreement, whenever a potential conflict of interest exists or arises between the General
Partner or any of its Affiliates, on the one hand, and the Partnership, any of its
Subsidiaries or any Partner, on the other hand, any resolution or course of action by the
General Partner or its Affiliates 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,
any Group Member Agreement or of any agreement contemplated herein or therein, or of any
duty expressed or implied by law or equity, if the resolution or course of action in respect
of such conflict
28
of interest is or, by operation of this Agreement is deemed to be, fair and reasonable to
the Partnership; provided that, any conflict of interest and any resolution of such conflict
of interest shall be deemed fair and reasonable to the Partnership if such conflict of
interest or resolution is (i) approved by Special Approval, or (ii) on terms no less
favorable to the Partnership than those generally being provided to or available from
unrelated third parties. The Audit and Conflicts Committee (in connection with a Special
Approval) shall be authorized in connection with 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) the totality of
the relationships between the parties involved (including other transactions that may be
particularly favorable or advantageous to the Partnership); (iii) any customary or accepted
industry practices and any customary or historical dealings with a particular Person; (iv)
any applicable generally accepted accounting or engineering practices or principles; (v) the
relative cost of capital of the parties and the consequent rates of return to the equity
holders of the parties; and (vi) such additional factors as the Audit and Conflicts
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 Audit and Conflicts Committee to consider the interests of
any Person other than the Partnership. In the absence of bad faith by the Audit and
Conflicts Committee or the General Partner, the resolution, action or terms so made, taken
or provided (including granting Special Approval) by the Audit and Conflicts Committee or
the General Partner with respect to such matter shall be conclusive and binding on all
Persons (including all Partners) and shall not constitute a breach of this Agreement, of the
Group Member Agreement or any other agreement contemplated herein or therein, 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. It shall be presumed that the resolution, action or terms
made, taken or provided by the Audit and Conflicts Committee or the General Partner was not
made, taken or provided in bad faith, and in any proceeding brought by any Limited Partner
or by or on behalf of such Limited Partner or any other Limited Partner or the Partnership
challenging such resolution, action or terms, the Person bringing or prosecuting such
proceeding shall have the burden of overcoming such presumption.
(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 interest 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, any Subsidiary or any Limited Partner, (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) in “good faith” or
under another express standard, the General Partner or such Affiliate shall act under such
express standard and, with respect to clauses (i), (ii) and (iii) of this Section
7.9(b), shall not be subject to any other or different standards imposed by this
Agreement, any Group Member Agreement, any other agreement contemplated hereby or thereby or
under the Delaware Act or any other law, rule or regulation or at equity.
(c) Whenever the General Partner makes a determination or takes or declines to take any
other action, or any of its Affiliates causes it to do so, in its individual capacity as
opposed to in its capacity as a general partner of the Partnership, whether under this
Agreement or any other agreement contemplated hereby or otherwise, then the General Partner,
or such Affiliates causing it to do so, are entitled to make such determination or to take
or decline to take such other action free of any fiduciary duty or obligation whatsoever to
the Partnership, any Limited Partner, and the General Partner, or such Affiliates causing it
to do so, shall not be required to act in good faith or pursuant to any other standard
imposed by this Agreement, any other agreement contemplated hereby or under the Delaware Act
or any other law, rule or regulation or at equity. By way of illustration and not of
limitation, whenever the phrase, “at the option of the General Partner,” or some variation
of that phrase, is used in this Agreement, it indicates that the General Partner is acting
in its individual capacity. For the avoidance of doubt, whenever the General Partner votes
or transfers its Partnership Interests, or refrains from voting or transferring its
Partnership Interests, it shall be acting in its individual capacity.
(d) Notwithstanding anything to the contrary in this Agreement, the General Partner and
its Affiliates shall have no duty or obligation, express or implied, to (i) sell or
otherwise dispose of any asset of the Partnership Group other than in the ordinary course of
business or (ii) permit the Partnership or any
other Group Member to use any facilities or assets of the General Partner and its
Affiliates, except as may be provided in
29
contracts entered into from time to time
specifically dealing with such use. Any determination by the General Partner or any of its
Affiliates to enter into such contracts shall be at its option.
(e) Except as expressly set forth in this Agreement, neither the General Partner nor
any other Indemnitee shall have any duties or liabilities, including fiduciary duties, to
the Partnership or any Limited Partner and the provisions of this Agreement, to the extent
that they restrict, eliminate or otherwise modify the duties and liabilities, including
fiduciary duties, of the General Partner or any other Indemnitee otherwise existing at law
or in equity, are agreed by the Partners to replace such other duties and liabilities of the
General Partner or such other Indemnitee. To the extent that, at law or in equity, an
Indemnitee has duties, including fiduciary duties, and liabilities relating thereto to the
Partnership or to the Partners, the General Partner and any other Indemnitee acting in
connection with the Partnership’s business or affairs shall not be liable to the Partnership
or to any Partner for its good faith reliance on the provisions of this Agreement.
(f) The Limited Partners hereby authorize the General Partner, on behalf of the
Partnership as a partner or member of a Group Member, to approve of actions by the general
partner or managing member of such Group Member, similar to those actions permitted to be
taken by the General Partner pursuant to this Section 7.9.
(g) 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 may be considered
by the General Partner or its Board of Directors (or any committee thereof, including the
Audit and Conflicts Committee) in the context of all similar or related transactions.
7.10 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 to be taken in reliance upon the opinion (including 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, a duly appointed
attorney or attorneys-in-fact or the duly authorized officers of the Partnership. 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.
7.11 Purchase or Sale of Partnership Securities. The General Partner may cause the Partnership to
purchase or otherwise acquire Partnership Securities. Such Partnership Securities shall be held by
the Partnership as treasury securities unless they are expressly canceled by action of an
appropriate officer of the General Partner. As long as Partnership Securities are held by any Group
Member, such Partnership Securities 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 Partnership Securities for its own
account, subject to the provisions of Articles IV and X.
7.12 Registration Rights of the General Partner and its Affiliates.
(a) If (i) the General Partner or any Affiliate of the General Partner (including for
purposes of this Section 7.12, any Person that is an Affiliate of the General
Partner at the date hereof notwithstanding that it may
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later cease to be an Affiliate of the
General Partner) holds Partnership Securities that it desires to sell and (ii) Rule 144 of
the Securities Act (or any successor rule or regulation to Rule 144) or another exemption
from registration is not available to enable such holder of Partnership Securities (the
“Holder”) to dispose of the number of Partnership Securities it desires to sell at
the time it desires to do so without registration under the Securities Act, then at the
option and upon the request of the Holder, the Partnership shall file with the Commission as
promptly as practicable after receiving such request, and use all reasonable efforts to
cause to become effective and remain effective for a period of not less than six months
following its effective date or such shorter period as shall terminate when all Partnership
Securities covered by such registration statement have been sold, a registration statement
under the Securities Act registering the offering and sale of the number of Partnership
Securities specified by the Holder; provided, however, that the Partnership shall not be
required to effect more than three registrations pursuant to this Section 7.12(a)
and Section 7.12(b); and provided further, however, that if the Audit and Conflicts
Committee determines in good faith that the requested registration would be materially
detrimental to the Partnership and its Partners because such registration would (x)
materially interfere with a significant acquisition, reorganization or other similar
transaction involving the Partnership, (y) require premature disclosure of material
information that the Partnership has a bona fide business purpose for preserving as
confidential or (z) render the Partnership unable to comply with requirements under
applicable securities laws, then the Partnership shall have the right to postpone such
requested registration for a period of not more than six months after receipt of the
Holder’s request, such right pursuant to this Section 7.12(a) or Section
7.12(b) not to be utilized more than once in any twelve-month period. Except as
provided in the preceding sentence, the Partnership shall be deemed not to have used all
reasonable efforts to keep the registration statement effective during the applicable period
if it voluntarily takes any action that would result in Holders of Partnership Securities
covered thereby not being able to offer and sell such Partnership Securities at any time
during such period, unless such action is required by applicable law. In connection with
any registration pursuant to the first sentence of this Section 7.12(a), the
Partnership shall (i) promptly prepare and file (A) 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 Holder 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 or partnership doing business in such
jurisdiction solely as a result of such registration, and (B) such documents as may be
necessary to apply for listing or to list the Partnership Securities subject to such
registration on such National Securities Exchange as the Holder shall reasonably request,
and (ii) do any and all other acts and things that may be necessary or appropriate to enable
the Holder to consummate a public sale of such Partnership Securities in such states. Except
as set forth in Section 7.12(d), all costs and expenses of any such registration and
offering (other than the underwriting discounts and commissions) shall be paid by the
Partnership, without reimbursement by the Holder.
(b) If any Holder holds Partnership Securities that it desires to sell and Rule 144 of
the Securities Act (or any successor rule or regulation to Rule 144) or another exemption
from registration is not available to enable such Holder to dispose of the number of
Partnership Securities it desires to sell at the time it desires to do so without
registration under the Securities Act, then at the option and upon the request of the
Holder, the Partnership shall file with the Commission as promptly as practicable after
receiving such request, and use all reasonable efforts to cause to become effective and
remain effective for a period of not less than six months following its effective date or
such shorter period as shall terminate when all Partnership Securities covered by such shelf
registration statement have been sold, a “shelf” registration
statement covering the Partnership Securities specified by the Holder on an appropriate
form under Rule 415 under the Securities Act, or any similar rule that may be adopted by the
Commission; provided, however, that the Partnership shall not be required to effect more
than three registrations pursuant to Section 7.12(a) and this Section
7.12(b); and provided further, however, that if the Audit and Conflicts Committee
determines in good faith that any offering under, or the use of any prospectus forming a
part of, the shelf registration statement would be materially detrimental to the Partnership
and its Partners because such offering or use would (x) materially interfere with a
significant acquisition, reorganization or other similar transaction involving the
Partnership, (y) require premature disclosure of material information that the Partnership
has a bona fide business purpose for preserving as confidential or (z) render the
Partnership unable to comply with requirements under applicable securities laws, then the
Partnership shall have the right to suspend such offering or use for a period of not more
than six months after receipt of the Holder’s request, such right pursuant to Section
7.12(a) or this Section
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7.12(b) not to be utilized more than once in any
twelve-month period. Except as provided in the preceding sentence, the Partnership shall be
deemed not to have used all reasonable efforts to keep the shelf registration statement
effective during the applicable period if it voluntarily takes any action that would result
in Holders of Partnership Securities covered thereby not being able to offer and sell such
Partnership Securities at any time during such period, unless such action is required by
applicable law. In connection with any shelf registration pursuant to this Section
7.12(b), the Partnership shall (i) promptly prepare and file (A) such documents as may
be necessary to register or qualify the securities subject to such shelf registration under
the securities laws of such states as the Holder 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 or partnership doing business in
such jurisdiction solely as a result of such shelf registration, and (B) such documents as
may be necessary to apply for listing or to list the Partnership Securities subject to such
shelf registration on such National Securities Exchange as the Holder shall reasonably
request, and (ii) do any and all other acts and things that may be necessary or appropriate
to enable the Holder to consummate a public sale of such Partnership Securities in such
states. Except as set forth in Section 7.12(d), all costs and expenses of any such
shelf registration and offering (other than the underwriting discounts and commissions)
shall be paid by the Partnership, without reimbursement by the Holder.
(c) If the Partnership shall at any time propose to file a registration statement under
the Securities Act for an offering of equity 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 Holder in such
registration statement as the Holder shall request; provided, that the Partnership is not
required to make any effort or take an action to so include the securities of the Holder
once the registration statement is declared effective by the Commission, including any
registration statement providing for the offering from time to time of securities pursuant
to Rule 415 of the Securities Act. If the proposed offering pursuant to this Section
7.12(c) shall be an underwritten offering, then, in the event that the managing
underwriter or managing underwriters of such offering advise the Partnership and the Holder
in writing that in their opinion the inclusion of all or some of the Holder’s Partnership
Securities 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
held by the Holder that, in the opinion of the managing underwriter or managing
underwriters, will not so adversely and materially affect the offering. Except as set forth
in Section 7.12(d), all costs and expenses of any such registration and offering
(other than the underwriting discounts and commissions) shall be paid by the Partnership,
without reimbursement by the Holder.
(d) If underwriters are engaged in connection with any registration referred to in this
Section 7.12, 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 7.7, the Partnership shall, to the fullest
extent permitted by law, indemnify and hold harmless the Holder, its officers, directors and
each Person who controls the Holder (within the meaning of the Securities Act) and any agent
thereof (collectively, “Indemnified Persons”) from and against any and all losses,
claims, damages, liabilities, joint or several, expenses (including legal fees and
expenses), judgments, fines, penalties, interest, settlements or other amounts arising from
any and all claims, demands, actions, suits or proceedings, whether civil, criminal,
administrative or investigative, in which any Indemnified Person may be involved, or is
threatened to be
involved, as a party or otherwise, under the Securities Act or otherwise (hereinafter
referred to in this Section 7.12(d) 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
Partnership 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 any Indemnified Person 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
32
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.
(e) The provisions of Sections 7.12(a), 7.12(b) and 7.12(c)
shall continue to be applicable with respect to the General Partner (and any of the General
Partner’s Affiliates) after it 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 Holder to sell all of the Partnership Securities with respect to which
it has requested during such two-year period inclusion in a registration statement otherwise
filed or that a registration statement be filed; provided, however, that the Partnership
shall not be required to file successive registration statements covering the same
Partnership Securities for which registration was demanded during such two-year period. The
provisions of Section 7.12(d) shall continue in effect thereafter.
(f) The rights to cause the Partnership to register Partnership Securities pursuant to
this Section 7.12 may be assigned (but only with all related obligations) by a
Holder to a transferee or assignee of such Partnership Securities, provided (i) the
Partnership is, within a reasonable time after such transfer, furnished with written notice
of the name and address of such transferee or assignee and the Partnership Securities with
respect to which such registration rights are being assigned; and (b) such transferee or
assignee agrees in writing to be bound by and subject to the terms set forth in this
Section 7.12.
(g) Any request to register Partnership Securities pursuant to this Section
7.12 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.
7.13 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 and any officer
of the General Partner authorized by the General Partner to act on behalf of and in the name of the
Partnership 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 authorized contracts on behalf of the
Partnership, and such Person shall be entitled to deal with the General Partner or any such officer
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 or any such officer in
connection with any such dealing. In no event shall any Person dealing with the General Partner or
any such officer or its representatives be obligated to ascertain that the terms of the Agreement
have been complied with or to inquire into the necessity or expedience of any act or action of the
General Partner or any such officer or its representatives. Each and every certificate, document or
other instrument executed on behalf of the Partnership by the General Partner or any such officer
or its representatives shall be conclusive evidence in favor of any and every Person relying
thereon or claiming thereunder that (i) at the time of the execution and delivery of such
certificate, document or instrument, this Agreement was in full force and effect, (ii) 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 (iii) 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.
ARTICLE VIII
Books, Records, Accounting and Reports
Books, 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 all books and records necessary to provide to the Limited Partners any information
required to be provided pursuant to Section 3.4(a). Any books and records maintained by or
on behalf of the Partnership in the regular course of its business, including the record of the
Record Holders 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 drives, punch
cards, magnetic tape, photographs, micrographics or any other information storage device; provided,
that the books and records so maintained are
33
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 U.S. GAAP.
8.2 Fiscal Year. The fiscal year of the Partnership shall be a fiscal year ending December 31.
8.3 Reports.
(a) As soon as practicable, but in no event later than 120 days after the close of each
fiscal year of the Partnership, the General Partner shall cause to be mailed or made
available to each Record Holder of a Unit as of a date selected by the General Partner, an
annual report containing consolidated financial statements of the Partnership for such
fiscal year of the Partnership, presented in accordance with U.S. GAAP, including a balance
sheet and statements of operations and comprehensive income, Partnership equity and cash
flows, such statements to be audited by an independent registered accounting firm selected
by the General Partner.
(b) As soon as practicable, but in no event later than 90 days after the close of each
Quarter except the last Quarter of each fiscal year, the General Partner shall cause to be
mailed or made available to each Record Holder of a Unit, as of a date selected by the
General Partner, such 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.
(c) Such reports shall contain disclosure indicating that the assets and liabilities of
the Partnership Group are separate from the assets and liabilities of EPCO and the other
Affiliates of the General Partner.
ARTICLE IX
Tax Matters
Tax Matters
9.1 Tax Returns and Information. The Partnership shall timely file all returns of the Partnership that
are required for federal, state and local income tax purposes on the basis of the accrual method
and a taxable year ending on December 31. The tax information reasonably required by Record Holders
for federal and state income tax reporting purposes with respect to a taxable year shall be
furnished to them within 90 days of the close of the calendar year in which the Partnership’s
taxable year ends. 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.
9.2 Tax Elections.
(a) The Partnership shall make the election under Section 754 of the Code in accordance
with applicable regulations thereunder, subject to the reservation of the right to seek to
revoke any such election upon the General Partner’s determination that such revocation is in
the best interests of the Limited Partners. Notwithstanding any other provision herein
contained, for the 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 a Limited Partner Interest will be deemed to be the lowest
quoted closing price of such Limited Partner Interests on any National Securities Exchange
on which such Limited Partner Interests are listed or admitted for trading during the
calendar month in which such transfer is deemed to occur pursuant to Section 6.2(g)
without regard to the actual price paid by such transferee.
(b) Except as otherwise provided herein, the General Partner shall determine whether
the Partnership should make any other elections permitted by the Code.
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9.3 Tax Controversies. Subject to the provisions hereof, the General Partner is designated as the Tax
Matters Partner (as defined in 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 resulting administrative and judicial proceedings, and to
expend Partnership funds for professional services and costs associated therewith. Each Partner
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 Withholding. Notwithstanding any other provision of this Agreement, the General Partner is
authorized to take any action that may be required to cause the Partnership to comply with any
withholding requirements established under the Code or any other federal, state or local law
including pursuant to Sections 1441, 1442, 1445 and 1446 of the Code. To the extent that the
Partnership is required or elects to withhold and pay over to any taxing authority any amount
resulting from the allocation or distribution of income to any Partner (including by reason of
Section 1446 of the Code), the General Partner may treat the amount withheld as a distribution of
cash pursuant to Section 6.3 in the amount of such withholding from such Partner.
ARTICLE X
Admission of Partners
Admission of Partners
10.1 Admission of Limited Partners.
(a) By acceptance of the transfer of any Limited Partner Interests in accordance
with this Section 10.1 or the issuance of any Limited Partner Interests in a merger
or consolidation pursuant to Article XIV, and except as provided in Section
4.8, each transferee of a Limited Partner Interest (including any nominee holder or an
agent or representative acquiring such Limited Partner Interests for the account of another
Person) (i) shall be admitted to the Partnership as a Limited Partner with respect to the
Limited Partner Interests so transferred to such Person when any such transfer or admission
is reflected in the books and records of the Partnership, with or without execution of this
Agreement, (ii) shall become bound by the terms of, and shall be deemed to have executed,
this Agreement, (iii) shall become the Record Holder of the Limited Partner Interests so
transferred, (iv) represents that the transferee has the capacity, power and
authority to enter into this Agreement, (v) grants the powers of attorney set forth in
this Agreement and (vi) makes the consents and waivers contained in this Agreement. The
transfer of any Limited Partner Interests and the admission of any new Limited Partner shall
not constitute an amendment to this Agreement. A Person may become a Record Holder of a
Limited Partner Interest without the consent or approval of any of the Partners. A Person
may not become a Limited Partner without acquiring a Limited Partner Interest and until such
Person is reflected in the books and records of the Partnership as the Record Holder of such
Limited Partner Interest. The rights and obligations of a Person who is a Non-citizen
Assignee shall be determined in accordance with Sections 4.8 and 4.9 hereof.
(b) The name and mailing address of each Limited Partner shall be listed on the books
and records of the Partnership maintained for such purpose by the Partnership or the
Transfer Agent. The General Partner shall update the books and records of the Partnership
from time to time as necessary to reflect accurately the information therein (or shall cause
the Transfer Agent to do so, as applicable). A Limited Partner Interest may be represented
by a Certificate, as provided in Section 4.1 hereof.
(c) Any transfer of a Limited Partner Interest shall not entitle the transferee to
share in the profits and losses, to receive distributions, to receive allocations of income,
gain, loss, deduction or credit or any similar item or to any other rights to which the
transferor was entitled until the transferee becomes a Limited Partner pursuant to
Section 10.1(a).
10.2 Admission of Successor General Partner. A successor General Partner approved pursuant to
Section 11.1 or 11.2 or the transferee of or successor to all of the General
Partner’s Partnership Interest as general partner in the Partnership pursuant to Section
4.6 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
predecessor or transferring General Partner pursuant to Section 11.1 or 11.2 or the
transfer of the General Partner’s Partnership Interest as a general partner in the Partnership
pursuant to Section 4.6; provided, however, that no such successor shall be admitted to the
Partnership until compliance with the terms of Section 4.6 has occurred and such
35
successor
has executed and delivered such other documents or instruments as may be required to effect such
admission. Any such successor shall, subject to the terms hereof, carry on the business of the
Partnership without dissolution.
10.3 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 to reflect such admission and, if
necessary, to prepare as soon as practicable an amendment to this Agreement and, if required by
law, the General Partner shall prepare and file an amendment to the Certificate of Limited
Partnership, and the General Partner may for this purpose, among others, exercise the power of
attorney granted pursuant to Section 2.6.
ARTICLE XI
Withdrawal or Removal of Partners
Withdrawal or Removal of Partners
11.1 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 receiving
Special Approval and giving notice to the other Partners;
(ii) the General Partner transfers all of its rights as General Partner
pursuant to Section 4.6, following the receipt of Special Approval for such
transfer;
(iii) the General Partner is removed pursuant to Section 11.2;
(iv) the General Partner (A) makes a general assignment for the benefit of
creditors; (B) files a voluntary bankruptcy petition for relief under Chapter 7 of
the United States Bankruptcy Code; (C) files a petition or answer seeking for itself
a liquidation, dissolution or similar relief (but not a reorganization) 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 Section
11.1(a)(iv); or (E) seeks, consents to or acquiesces in the appointment of a
trustee (but not a debtor-in-possession), receiver or liquidator of the General
Partner or of all or any substantial part of its properties;
(v) a final and non-appealable order of relief under Chapter 7 of the United
States Bankruptcy Code is entered by a court with appropriate jurisdiction pursuant
to a voluntary or involuntary petition by or against the General Partner; or
(vi) (A) in the event the General Partner is a corporation, 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; (B) in
the event the General Partner is a partnership or a limited liability company, the
dissolution and commencement of winding up of the General Partner; (C) in the event
the General Partner is acting in such capacity by virtue of being a trustee of a
trust, the termination of the trust; (D) in the event the General Partner is a
natural person, his death or adjudication of incompetency; and (E) otherwise in the
event of the termination of the General Partner.
If an Event of Withdrawal specified in Section 11.1(a)(iv), (v) or
(vi)(A), (B), (C) or (E) occurs, the withdrawing General
Partner shall give 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
11.1 shall result in the withdrawal of the General Partner from the Partnership.
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(b) Withdrawal of the General Partner from the Partnership upon the occurrence of an
Event of Withdrawal shall not constitute a breach of this Agreement under the following
circumstances: (i) at any time during the period beginning on the Closing Date and ending at
12:00 midnight, Eastern Standard Time, on December 31, 2016, 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 receives Special Approval and is approved by holders holding at least a majority
of the Outstanding Units (excluding Common Units held by the General Partner and its
Affiliates) and the General Partner delivers to the Partnership an Opinion of Counsel
(“Withdrawal Opinion of Counsel”) that such withdrawal (following the selection of
the successor General Partner) would not result in the loss of the limited liability of any
Limited Partner or cause the Partnership to be treated as an association taxable as a
corporation or otherwise to be taxed as an entity for federal income tax purposes (to the
extent not previously treated as such); (ii) at any time after 12:00 midnight, Eastern
Standard Time, on December 31, 2016, the General Partner voluntarily withdraws by giving at
least 90 days’ advance notice to the Unitholders, such withdrawal to take effect on the date
specified in such notice; (iii) at any time that the General Partner ceases to be the
General Partner pursuant to Section 11.1(a)(ii) or is removed pursuant to
Section 11.2; 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 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 general partner or managing member, as the case may be,
of any other Group Members. If the General Partner gives a notice of withdrawal pursuant to
Section 11.1(a)(i), the holders of a majority of Outstanding Units, may, prior to
the effective date of such withdrawal, elect a successor General Partner. The Person so
elected as successor General Partner shall automatically become the successor general
partner or managing member, as the case may be, of any other Group Members of which the
General Partner is a general partner or managing member. If, prior to the effective date of
the General Partner’s withdrawal, a successor is not selected by the Unitholders as provided
herein or the Partnership does not
receive a Withdrawal Opinion of Counsel, the Partnership shall be dissolved in
accordance with Section 12.1. Any successor General Partner elected in accordance
with the terms of this Section 11.1 shall be subject to the provisions of
Section 10.3.
11.2 Removal of the General Partner. The General Partner may be removed if such removal receives
Special Approval and is approved by Unitholders holding at least
662/3% of the Outstanding Units
(including Units held by the General Partner and its Affiliates) voting as a single class. Any such
action by such holders for removal of the General Partner must also provide for the election of a
successor General Partner by the Unitholders holding a majority of the Outstanding Units (including
Units held by the General Partner and its Affiliates) voting as a single class. Such removal shall
be effective immediately following the admission of a successor General Partner pursuant to
Section 10.3. The removal of the General Partner shall also automatically constitute the
removal of the General Partner as general partner or managing member, as the case may be, of any
other Group Members of which the General Partner is a general partner or managing member. If a
Person is elected as a successor General Partner in accordance with the terms of this Section
11.2, such Person shall, upon admission pursuant to Section 10.3, automatically become
a successor general partner or managing member, as the case may be, of any other Group Members of
which the General Partner is a general partner or managing member. The right of the holders of
Outstanding Units to remove the General Partner shall not exist or be exercised unless the
Partnership has received an opinion opining as to the matters covered by a Withdrawal Opinion of
Counsel. Any successor General Partner elected in accordance with the terms of this Section
11.2 shall be subject to the provisions of Sections 10.2 and 10.3.
11.3 Interest of Departing General 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 holders of Outstanding Units under circumstances where Cause does not exist and the
Units held by the General Partner and its Affiliates are not voted in favor of such removal,
if a successor General Partner is elected in accordance with the terms of Sections
11.1 or 11.2, the Departing General Partner shall have the option exercisable
prior to the effective date of the departure of such Departing General Partner to require
its successor to purchase its Partnership Interest as
37
a general partner in the Partnership
and any partnership or member interest as the general partner or managing member of any
other Group Member, as applicable (collectively, the “Purchased Interest”) in
exchange for an amount in cash equal to the fair market value of such Purchased Interest,
such amount to be determined and payable as of the effective date of its departure or, if
there is not agreement as to the fair market value of such Purchased Interest, within ten
(10) days after such agreement is reached. If the General Partner is removed by the
Unitholders under circumstances where Cause exists or if the General Partner withdraws under
circumstances where such withdrawal violates this Agreement, and if a successor General
Partner is elected in accordance with the terms of Sections 11.1 or 11.2 (or
if the business of the Partnership is continued pursuant to Section 12.2 and the
successor General Partner is not the former General Partner), such successor shall have the
option, exercisable prior to the effective date of the departure of such Departing General
Partner (or, in the event the business of the Partnership is continued, prior to the date
the business of the Partnership is continued), to purchase the Purchased Interest for such
fair market value of such Purchased Interest of the Departing General Partner. In either
event, the Departing General Partner shall be entitled to receive all reimbursements due
such Departing General Partner pursuant to Section 7.4, including any
employee-related liabilities (including severance liabilities), incurred in connection with
the termination of any employees employed by the Departing General Partner or its Affiliates
(other than the Partnership) for the benefit of the Partnership or the other Group Members.
For purposes of this Section 11.3(a), the fair market value of the Departing
General Partner’s Purchased Interest shall be determined by agreement between the Departing
General Partner and its successor or, failing agreement within 30 days after the effective
date of such Departing General Partner’s departure, by an independent investment banking
firm or other independent expert selected by the Departing General 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 General Partner shall designate an independent
investment banking firm or other independent expert, the Departing General 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 third independent
investment banking firm or other independent expert shall determine the fair market value of
the Purchased Interest of the Departing General Partner. In making its determination, such
third independent investment banking firm or other independent expert may consider the then
current trading price of Units on any National Securities Exchange on which Units are then
listed or admitted for trading, the value of the Partnership’s assets, the rights and
obligations of the Departing General Partner and other factors it may deem relevant.
(b) If the Purchased Interest is not purchased in the manner set forth in Section
11.3(a), the Departing General Partner (or its transferee) shall become a Limited
Partner and its Purchased Interest shall be converted into Common Units pursuant to a
valuation made by an investment banking firm or other independent expert selected pursuant
to Section 11.3(a), without reduction in such Partnership Interest (but subject to
proportionate dilution by reason of the admission of its successor). Any successor General
Partner shall indemnify the Departing General Partner (or its transferee) as to all debts
and liabilities of the Partnership arising on or after the date on which the Departing
General Partner (or its transferee) becomes a Limited Partner. For purposes of this
Agreement, conversion of the Purchased Interest of the Departing General Partner to Units
will be characterized as if the General Partner (or its transferee) contributed its
Purchased Interest to the Partnership in exchange for the newly issued Units.
(c) If a successor General Partner is elected in accordance with the terms of
Sections 11.1 or 11.2 (or if the business of the Partnership is continued
pursuant to Section 12.2 and the successor General Partner is not the former General
Partner), and the option described in Section 11.3(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 Partnership cash in the amount equal to (i)
the quotient obtained by dividing (x) the Percentage Interest of the Departing Partner by
(y) 100% less the Percentage Interest of the Departing General Partner multiplied by (ii)
the Net Agreed Value of the Partnership’s assets on such date. In such event, such
successor General Partner shall, subject to the following sentence, be entitled to the
Percentage Interest of all Partnership allocations and distributions to which the Departing
General Partner was entitled. The successor General
38
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 equal to its Percentage Interest.
11.4 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 Limited Partner
Interest becomes a Record Holder of the Limited Partner Interest so transferred, such transferring
Limited Partner shall cease to be a Limited Partner with respect to the Limited Partner Interest so
transferred.
ARTICLE XII
Dissolution and Liquidation
Dissolution and Liquidation
12.1 Dissolution. The Partnership shall not be dissolved by the admission of 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, if a successor General Partner is
elected pursuant to Section 11.1 or 11.2, the Partnership shall not be dissolved
and such successor General Partner shall continue the business of the Partnership. The Partnership
shall dissolve, and (subject to Section 12.2) its affairs shall be wound up, upon:
(a) an Event of Withdrawal of the General Partner as provided in Section
11.1(a) (other than Section 11.1(a)(ii)), unless a successor is elected and an
Opinion of Counsel is received as provided in Section 11.1(b) or 11.2 and
such successor is admitted to the Partnership pursuant to Section 10.3;
(b) an election to dissolve the Partnership by the General Partner that receives
Special Approval and is approved by the holders of a majority of Outstanding Units;
(c) the entry of a decree of judicial dissolution of the Partnership pursuant to the
provisions of the Delaware Act; or
(d) at any time there are no Limited Partners, unless the Partnership is continued
without dissolution in accordance with the Delaware Act.
12.2 Continuation of the Business of the Partnership After Dissolution. Upon (a) dissolution of the
Partnership following an Event of Withdrawal caused by the withdrawal or removal of the General
Partner as provided in Section 11.1(a)(i) or (iii) and the failure of the Partners
to select a successor to such Departing General Partner pursuant to Sections 11.1 or
11.2, within 90 days thereafter, or (b) dissolution of the Partnership upon an event
constituting an Event of Withdrawal as defined in Section 11.1(a)(iv), (v) or
(vi), to the maximum extent permitted by law, within 180 days thereafter, the holders of a
majority of Outstanding Units may elect to continue the business of the Partnership on the terms
and conditions set forth in this Agreement by appointing as the successor General Partner a Person
approved by the holders of a majority of Outstanding Units. 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:
(i) the Partnership shall continue without dissolution unless earlier dissolved
in accordance with this Article XII;
(ii) if the successor General Partner is not the former General Partner, then
the interest of the former General Partner shall be treated in the manner provided
in Section 11.3; and
(iii) the successor General Partner shall be admitted to the Partnership as
General Partner, effective as of the Event of Withdrawal, by agreeing in writing to
be bound by this Agreement; provided, that the right of the holders of a majority of
Outstanding Units to approve a successor General Partner 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)
the Partnership would not be treated as an association taxable as a corporation or
otherwise be taxable as an entity for
39
federal income tax purposes upon the exercise
of such right to continue (to the extent not already so treated or taxed).
12.3 Liquidator. Upon dissolution of the Partnership, unless the Partnership is continued pursuant to
Section 12.2, the General Partner shall select one or more Persons to act as Liquidator.
The Liquidator (if other than the General Partner) shall be entitled to receive such compensation
for its services as may be approved by holders of at least a majority of the Outstanding Units
voting as a single class. The Liquidator (if other than the General Partner) shall agree not to
resign at any time without 15 days’ prior notice and may be removed at any time, with or without
cause, by notice of removal approved by holders of at least a majority of the Outstanding Units
voting as a single class. 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 holders of at least a majority
of the Outstanding Units voting as a single class. 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 XII, 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 7.3, necessary or appropriate to carry out the
duties and functions of the Liquidator hereunder for and during the period of time required to
complete the winding up and liquidation of the Partnership as provided for herein.
12.4 Liquidation. The Liquidator shall proceed to dispose of the assets of the Partnership, discharge
its liabilities, and otherwise wind up its affairs in such manner and over such period as
determined by the Liquidator, subject to Section 17-804 of the Delaware Act and the following:
(a) Disposition of Assets. The assets may be disposed of by public or private sale on
such terms as the Liquidator may agree, or the Liquidator may distribute the Partnership’s
assets, in whole or in part, in kind if (i) agreed to by the Partner or Partners or (ii) it
determines that a sale would be impractical or would cause undue loss to the Partners.
Distributions of assets in kind may be made on a non-Pro Rata basis to the Partners if the
Liquidator determines in good faith that such non-Pro Rata treatment is fair and reasonable
to the Partners as whole; provided, that any such in-kind distribution shall be deemed
fair and reasonable if approved by Special Approval. If any property is distributed in
kind, the Partner receiving the property shall be deemed for purposes of Section
12.4(c) to have received cash equal to its fair market value; and contemporaneously
therewith, appropriate cash distributions must be made to the other Partners. The Liquidator
may defer liquidation or distribution of the Partnership’s assets for a reasonable time if
it determines that an immediate sale or distribution of all or some of the Partnership’s
assets would be impractical or would cause undue loss to the Partners.
(b) Discharge of Liabilities. Liabilities of the Partnership include amounts owed to
the Liquidator as compensation for serving in such capacity (subject to the terms of
Section 12.3) and amounts to Partners otherwise than in respect of their
distribution rights under Article VI. With respect to any liability that is
contingent, conditional or unmatured or is otherwise not yet due and payable, the Liquidator
shall either settle such claim for such amount as it thinks appropriate or establish a
reserve of cash or other assets to provide for its payment (or otherwise make reasonable
provision for payment of such claims). When paid, any unused portion of the reserve shall be
distributed as additional liquidation proceeds.
(c) Liquidation Distributions. All property and all cash in excess of that required to
discharge liabilities as provided in Section 12.4(b) shall be distributed to the
Partners in accordance with, and to the extent of, the positive balances in their respective
Capital Accounts, as determined after taking into account all Capital Account adjustments
(other than those made by reason of distributions pursuant to this Section 12.4(c))
for the taxable year of the Partnership during which the liquidation of the Partnership
occurs (with such date of occurrence being determined pursuant to Treasury Regulation
Section 1.704-1(b)(2)(ii)(g)), and such distribution shall be made by the end of such
taxable year (or, if later, within 90 days after said date of such occurrence).
40
12.5 Cancellation of Certificate of Limited Partnership. Upon the completion of the distribution of
Partnership cash and property as provided in Section 12.4 in connection with the
liquidation of the Partnership, 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.
12.6 Return of Contributions. The General Partner shall not be personally liable for, and shall have no
obligation to contribute or loan any monies or property to the Partnership to enable it to
effectuate, the return of the Capital Contributions of the Limited Partners or Unitholders, or any
portion thereof, it being expressly understood that any such return shall be made solely from
Partnership assets.
12.7 Waiver of Partition. To the maximum extent permitted by law, each Partner hereby waives any right
to partition of the Partnership property.
12.8 Capital Account Restoration. No Limited Partner shall have any obligation to restore any negative
balance in its Capital Account upon liquidation of the Partnership. The General Partner shall be
obligated to restore any negative capital balance in its Capital Account upon liquidation of its
interest in the Partnership by the end of the taxable year of the Partnership during which such
liquidation occurs, or, if later, within 90 days after the date of such liquidation.
12.9 Certain Prohibited Acts. Without obtaining Special Approval, the General Partner shall not take
any action to cause the Partnership to (i) make or consent to a general assignment for the benefit
of the Partnership’s creditors; (ii) file or consent to the filing of any bankruptcy, insolvency or
reorganization petition for relief under the United States Bankruptcy Code naming the Partnership
or otherwise seek, with respect to the Partnership, relief from debts or protection from creditors
generally; (iii) file or consent to the filing of a petition or answer seeking for the Partnership
a liquidation, dissolution, arrangement, or similar relief under any law; (iv) file an answer or
other pleading admitting or failing to contest the material allegations of a petition filed against
the Partnership in a proceeding of the type described in clauses (i) – (iii) of this
Section 12.9; (v) seek, consent to or acquiesce in the appointment of a receiver,
liquidator, conservator, assignee, trustee, sequestrator, custodian or any similar official for the
Partnership or for all or any substantial portion of its properties; (vi) sell all or substantially
all of its assets, except in accordance with Section 7.3(b); (vii) dissolve or liquidate,
except in accordance with Article XII; or (viii) merge or consolidate, except in accordance
with Article XIV.
ARTICLE XIII
Amendment of Partnership Agreement; Meetings; Record Date
Amendment of Partnership Agreement; Meetings; Record Date
13.1 Amendments to be Adopted Solely by the General Partner. Each Partner agrees that the General
Partner, without the approval of any Partner, 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) the admission, substitution, withdrawal or removal of Partners in accordance with
this Agreement;
(c) a change that the General Partner determines to be necessary or appropriate to
qualify or continue the 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 to ensure that no Group Member will be treated as an association taxable as a corporation
or otherwise taxed as an entity for federal income tax purposes;
(d) a change that the General Partner determines (i) does not adversely affect the
Limited Partners (including any particular class of Partnership Interests as compared to
other classes of Partnership Interests) in any material respect, (ii) to be necessary or
appropriate to (A) satisfy any requirements, conditions or guidelines contained in any
opinion, directive, order, ruling or regulation of any federal or state agency or judicial
authority or contained in any federal or state statute (including the Delaware Act) or (B)
facilitate
the trading of the Limited Partner Interests (including the division of any class or
classes of Outstanding Limited Partner
41
Interests into different classes to facilitate
uniformity of tax consequences within such classes of Limited Partner Interests) or comply
with any rule, regulation, guideline or requirement of any National Securities Exchange on
which the Common Units are or will be listed or admitted for trading, (iii) to be necessary
or advisable in connection with action taken by the General Partner pursuant to Section
5.8 or (iv) to be required to effect the intent expressed in the Registration Statement
or the intent of the provisions of this Agreement or is otherwise contemplated by this
Agreement;
(e) a change in the fiscal year or taxable year of the Partnership and any other
changes that the General Partner determines to be necessary or appropriate as a result of a
change in the fiscal year or taxable year of the Partnership including, if the General
Partner shall so determine, a change in the definition of “Quarter” and the dates on
which distributions are to be made by the Partnership;
(f) an amendment that is necessary, in the Opinion of Counsel, to prevent the
Partnership, or the General Partner or its directors, officers, trustees or agents 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, regardless of
whether such are substantially similar to plan asset regulations currently applied or
proposed by the United States Department of Labor;
(g) an amendment that the General Partner determines to be necessary or appropriate in
connection with the authorization of issuance of any class or series of Partnership
Securities pursuant to Section 5.6;
(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 14.3;
(j) an amendment that the General Partner determines to be necessary or appropriate to
reflect, account for the formation by the Partnership of, or investment by the Partnership
in, any corporation, partnership, joint venture, limited liability company or other entity
other than the Operating Partnership, in connection with the conduct by the Partnership of
activities permitted by the terms of Section 2.4;
(k) an amendment necessary to require Limited Partners to provide a statement,
certification or other proof to the Partnership regarding whether such Limited Partner is
subject to United States federal income taxation on the income generated by the Partnership;
(l) a merger or conveyance pursuant to Section 14.3(d); or
(m) any other amendments substantially similar to the foregoing.
13.2 Amendment Procedures. Except as provided in Sections 13.1 and 13.3, all amendments
to this Agreement shall be made in accordance with the following requirements. Amendments to this
Agreement may be proposed only by the General Partner; provided, however that the General Partner
shall have no duty or obligation to propose any amendment to this Agreement and may decline to do
so free of any fiduciary duty or obligation whatsoever to the Partnership or any Limited Partner
and, in declining to propose an amendment to the fullest extent permitted by law, shall not be
required to act in good faith or pursuant to any other standard imposed by this Agreement, any
other agreement contemplated hereby or under the Delaware Act or any other law, rule or regulation
or at equity. A proposed amendment shall be effective upon its approval by the General Partner and
the holders of a majority of Outstanding Units, unless a greater or different percentage is
required under this Agreement or by Delaware law. Each proposed amendment that requires the
approval of the holders of a specified percentage of Outstanding Units shall be set forth in a
writing that contains the text of the proposed amendment. If such an amendment is proposed, the
General Partner shall seek the written approval of the requisite percentage of Outstanding Units or
call a meeting of the Unitholders to consider and vote on such proposed amendment. The General
Partner shall notify all Record
Holders upon final adoption of any such proposed amendments. Notwithstanding the provisions of
Sections 13.1 and 13.2, no amendment of (i) the
42
definitions of “Audit and Conflicts
Committee” or “Special Approval”, (ii) Section 2.9, (iii) Section 4.6, (iv)
Section 7.3, (v) Section 7.9(a), (vi) Section 8.3(c), (vii) Section
10.2, (viii) Section 12.9; (ix) Section 14.3 or (x) this Section 13.2
or any other provision of this Agreement requiring that Special Approval be obtained as a condition
to any action, shall be effective without first obtaining Special Approval.
13.3 Amendment Requirements.
(a) Notwithstanding the provisions of Sections 13.1 and 13.2, no
provision of this Agreement that establishes a percentage of Outstanding Units (including
Units deemed owned by the General Partner) 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 percentage unless such amendment is approved by the written consent or
the affirmative vote of holders of Outstanding Units whose aggregate Outstanding Units
constitute not less than the voting requirement sought to be reduced.
(b) Notwithstanding the provisions of Sections 13.1 and 13.2, no
amendment to this Agreement may (i) enlarge the obligations of any Limited Partner without
its consent, unless such shall be deemed to have occurred as a result of an amendment
approved pursuant to Section 13.3(c) or (ii) enlarge the obligations of, restrict in
any way any action by or rights of, or reduce in any way the amounts distributable,
reimbursable or otherwise payable to, the General Partner or any of its Affiliates without
its consent, which consent may be given or withheld at its option.
(c) Except as provided in Section 14.3, and without limitation of the General
Partner’s authority to adopt amendments to this Agreement without the approval of any
Partners as contemplated in Section 13.1, any amendment that would have a material
adverse effect on the rights or preferences of any class of Partnership Interests in
relation to other classes of Partnership Interests must be approved by the holders of not
less than a majority of the Outstanding Partnership Interests of the class affected.
(d) Notwithstanding any other provision of this Agreement, except for amendments
pursuant to Section 13.1 and except as otherwise provided by Section
14.3(b), no amendments shall become effective without the approval of the holders of at
least 90% of the Outstanding Units voting as a single class unless the Partnership obtains
an Opinion of Counsel to the effect that such amendment will not affect the limited
liability of any Limited Partner under the Delaware Act.
(e) Except as provided in Section 13.1, this Section 13.3 shall only be
amended with the approval of the holders of at least 90% of the Outstanding Units.
43
13.4 Special Meetings. All acts of Limited Partners to be taken pursuant to this Agreement shall be
taken in the manner provided in this Article XIII. Special meetings of the Limited Partners
may be called by the General Partner or by Limited Partners owning 20% or more of the Outstanding
Units of the class or classes for which a meeting is proposed. Limited Partners shall call a
special meeting by delivering to the General Partner one or more requests in writing stating that
the signing Limited Partners wish to call a special meeting and indicating the general or specific
purposes for which the special meeting is to be called. 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 less than 10 days nor 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.
13.5 Notice of a Meeting. Notice of a meeting called pursuant to Section 13.4 shall be given to
the Record Holders of the class or classes of Limited Partner Interests for which a meeting is
proposed in writing by mail or
other means of written communication in accordance with Section 16.1. 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.
13.6 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
13.11 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 Limited
Partner Interests are listed or admitted 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. If the General Partner does not set a Record Date, then (a) the Record Date
for determining the Limited Partners entitled to notice of or to vote at a meeting of the Limited
Partners shall be the close of business on the day next preceding the day on which notice is given,
and (b) the Record Date for determining the Limited Partners entitled to give approvals without a
meeting shall be the date the first written approval is deposited with the Partnership in care of
the General Partner in accordance with Section 13.11.
13.7 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 XIII.
13.8 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 it had
occurred at a meeting duly held after regular call and notice, if a quorum is present either in
person or by proxy. Attendance of a Limited Partner at a meeting shall constitute a waiver of
notice of the meeting, except when the Limited Partner attends the meeting for the express purpose
of objecting at the beginning of the meeting to 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, if the disapproval is expressly made at the meeting.
13.9 Quorum. The holders of a majority of the Outstanding Units of the class or classes (or if such
class has not been so designated into Units, a majority of the Outstanding Limited Partner
Interests of such class) for which a meeting has been called (including Limited Partner Interests
deemed owned by the General Partner) represented in person or by proxy shall constitute a quorum at
a meeting of Limited Partners of such class or classes unless any such action by the Limited
Partners requires approval by holders of a greater percentage of such Limited Partner Interests, in
which case the quorum shall be such greater percentage. At any meeting of the Limited Partners duly
called and held in
44
accordance with this Agreement at which a quorum is present, the act of Limited
Partners holding Outstanding Limited Partner Interests that in the aggregate represent a majority
of the Outstanding 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 Limited Partner Interests 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 Units or Outstanding Limited Partner Interests specified in this
Agreement (including Limited Partner Interests deemed owned by the General Partner). In the absence
of a quorum any meeting of Limited Partners may be adjourned from time to time by the affirmative
vote of holders of at least a majority of the Outstanding Units (or if such class has not been so
designated into Units, a majority of the Outstanding Limited Partner Interests of such class or
classes) entitled to vote at such meeting (including Limited Partner Interests deemed owned by the
General Partner) represented either in person or by proxy, but no other business may be transacted,
except as provided in Section 13.7.
13.10 Conduct of a 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 the determination of Persons entitled to vote, the existence of a quorum, the
satisfaction of the requirements of Section 13.4, the conduct
of voting, the validity and effect of any proxies, the determination of any controversies, votes or
challenges arising in connection with or during the meeting or voting and the adjournment of the
meeting to another time or place (whether or not a quorum is present). 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. Unless otherwise limited by the General Partner in designating the
chairman, the chairman of any meeting shall also have the authority to adjourn the meeting to
another time or place. 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 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.
13.11 Action Without a Meeting. If authorized by the General Partner, 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 owning not less than the minimum percentage
of the Outstanding Limited Partner Interests (including Limited Partner Interests deemed owned by
the General Partner) that would be necessary to authorize or take such action at a meeting at which
all the Limited Partners were present and voted (unless such provision conflicts with any rule,
regulation, guideline or requirement of any National Securities Exchange on which the Limited
Partner Interests are listed or admitted for trading, in which case the rule, regulation, guideline
or requirement of such exchange shall govern). 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 Limited Partner Interests held by the Limited Partners the
Partnership shall be deemed to have failed to receive a ballot for the Limited Partner Interests
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, and
(ii) is otherwise permissible under the state statutes then governing the rights, duties and
liabilities of the Partnership and the Partners.
13.12 Voting and Other Rights.
(a) Only those Record Holders of the applicable Limited Partner Interests on the Record
Date set pursuant to Section 13.6 (and also subject to the limitations contained in
the definition of “Outstanding”) shall
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be entitled to notice of, and to vote at, a
meeting of Limited Partners or to act with respect to matters as to which the holders of the
applicable Outstanding Limited Partner Interests 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
Outstanding Limited Partner Interests shall be deemed to be references to the votes or acts
of the Record Holders of such applicable Outstanding Limited Partner Interests. Except as
otherwise provided herein or pursuant to the designation of the terms of additional
Partnership Securities pursuant to Section 5.6, references in this Agreement to the
votes, consents or acts of holders of the Outstanding Units shall be deemed to refer to such
holders voting, consenting or acting as a single class, with each Unit entitled to one vote.
(b) With respect to Limited Partner Interests 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 Limited Partner Interests are registered,
such other Person shall, in exercising the voting rights in respect of such Limited Partner
Interests on any matter, and unless the arrangement between such Persons provides otherwise,
vote such Limited Partner Interests 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 13.12(b) (as well as all
other provisions of this Agreement) are subject to the provisions of Section 4.3.
ARTICLE XIV
Merger, Consolidation or Conversion
Merger, Consolidation or Conversion
14.1 Authority. The Partnership may merge or consolidate with or into one or more corporations, limited
liability companies, statutory trusts or associations, real estate investment trusts, common law
trusts or unincorporated businesses, including a partnership (whether general or limited and
including a limited liability partnership), or convert into any such entity, whether such entity is
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”) or a
written plan of conversion (“Plan of Conversion”) in accordance with this Article
XIV.
14.2 Procedure for Merger, Consolidation or Conversion. Merger, consolidation or conversion of the
Partnership pursuant to this Article XIV requires the prior consent of the General Partner
and Special Approval, provided, however, that, to the fullest extent permitted by law, the General
Partner shall have no duty or obligation to consent to any merger, consolidation or conversion of
the Partnership and may decline to do so free of any fiduciary duty or obligation whatsoever to the
Partnership, or any Limited Partner and, in declining to consent to a merger, consolidation or
conversion, shall not be required to act in good faith or pursuant to any other standard imposed by
this Agreement, any other agreement contemplated hereby or under the Delaware Act or any other law,
rule or regulation or at equity.
(a) If the General Partner shall determine to consent to the merger or consolidation,
the General Partner shall approve the Merger Agreement, which shall set forth:
(i) the names and jurisdictions of formation or organization of each of the
business entities proposing to merge or consolidate;
(ii) the name and jurisdiction of formation or organization of the business
entity that is to survive the proposed merger or consolidation (the “Surviving
Business Entity”);
(iii) the terms and conditions of the proposed merger or consolidation;
(iv) 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
partner interests, rights, securities or obligations of the Surviving Business
Entity; and (x) if any general or limited partner 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 partner interests, rights, securities or
obligations of the Surviving Business Entity, the cash, property or general or
limited partner interests, rights, securities or obligations of any general or
limited partnership, corporation, trust, limited liability
46
company, unincorporated
business or other entity (other than the Surviving Business Entity) which the
holders of such general or limited partner interests, securities or rights are to
receive in exchange for, or upon conversion of their general or limited partner
interests, securities or rights, and (y) in the case of securities represented by
certificates, upon the surrender of such certificates, which cash, property or
general or limited partner interests, rights, securities or obligations of the
Surviving Business Entity or any general or limited partnership, corporation, trust,
limited liability company, unincorporated business or other entity (other than the
Surviving Business Entity), or evidences thereof, are to be delivered;
(v) a statement of any changes in the constituent documents or the adoption of
new constituent documents (the articles or certificate of incorporation, articles of
trust, declaration of trust, certificate or agreement of limited partnership,
operating agreement or other similar charter or governing document) of the Surviving
Business Entity to be effected by such merger or consolidation;
(vi) the effective time of the merger, which may be the date of the filing of
the certificate of merger pursuant to Section 14.4 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, the effective
time shall be fixed at a date or time certain); and
(vii) such other provisions with respect to the proposed merger or
consolidation that the General Partner determines to be necessary or appropriate.
(b) If the General Partner shall determine to consent to the conversion, the General
Partner shall approve the Plan of Conversion, which shall set forth:
(i) the name of the converting entity and the converted entity;
(ii) a statement that the Partnership is continuing its existence in the
organizational form of the converted entity;
(iii) a statement as to the type of entity that the converted entity is to be
and the state or country under the laws of which the converted entity is to be
incorporated, formed or organized;
(iv) the manner and basis of exchanging or converting the equity securities of
each constituent business entity for, or into, cash, property or interests, rights,
securities or obligations of the converted entity;
(v) in an attachment or exhibit, the certificate of limited partnership of the
Partnership; and
(vi) in an attachment or exhibit, the certificate of limited partnership,
articles of incorporation, or other organizational documents of the converted
entity;
(vii) the effective time of the conversion, which may be the date of the filing
of the articles of conversion or a later date specified in or determinable in
accordance with the Plan of Conversion (provided, that if the effective time of the
conversion is to be later than the date of the filing of such articles of
conversion, the effective time shall be fixed at a date or time certain at or prior
to the time of the filing of such articles of conversion and stated therein); and
(viii) such other provisions with respect to the proposed conversion that the
General Partner determines to be necessary or appropriate.
47
14.3 Approval by Limited Partners.
(a) Except as provided in Section 14.3(d) and Section 14.3(e), the
General Partner, upon its approval of the Merger Agreement or the Plan of Conversion, shall
direct that the Merger Agreement or the Plan of Conversion be submitted to a vote of Limited
Partners, whether at a special meeting or by written consent, in either case in accordance
with the requirements of Article XIII. A copy or a summary of the Merger Agreement
or the Plan of Conversion, as the case may be, shall be included in or enclosed with the
notice of a special meeting or the written consent.
(b) Except as provided in Section 14.3(d) and Section 14.3(e), the
Merger Agreement or Plan of Conversion shall be approved upon receiving the affirmative vote
or consent of the holders of a majority of Outstanding Units.
(c) Except as provided in Section 14.3(d) and Section 14.3(e), 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 14.4, the merger or
consolidation may be abandoned pursuant to provisions therefor, if any, set forth in the
Merger Agreement or Plan of Conversion, as the case may be.
(d) Notwithstanding anything else contained in this Agreement, the General Partner is
permitted without Limited Partner approval, to (i) convert the Partnership or any other
Group Member into a new
limited liability entity or (ii) merge the Partnership or any Group Member into, or
convey all of the Partnership’s assets to, another limited liability entity which shall be
newly formed and shall have no assets, liabilities or operations at the time of such
conversion, merger or conveyance other than those it receives from the Partnership or other
Group Member, provided that in each such case (A) the General Partner has received an
Opinion of Counsel that the conversion, merger or conveyance, as the case may be, would not
result in the loss of the limited liability of any Limited Partner or any member of the
Partnership Group or cause the Partnership or the Operating Partnership to be treated as an
association taxable as a corporation or otherwise to be taxed as an entity for federal
income tax purposes (to the extent not previously treated as such), (B) the sole purpose of
such conversion, merger or conveyance is to effect a mere change in the legal form of the
Partnership into another limited liability entity, (C) the governing instruments of the new
entity provide the Limited Partners and the General Partner with rights and obligations that
are, in all material respects, the same rights and obligations of the Limited Partners and
the General Partner hereunder and (D) the organizational documents of the new entity and of
the new entity’s general partner, manager, board of directors or other Person exercising
management and decision-making control over the new entity recognize and provide for,
respectively, the establishment of an “Audit and Conflicts Committee” and the other matters
described in Section 4.6(c)(iv).
(e) Additionally, notwithstanding anything else contained in this Agreement, the
General Partner is permitted, without Limited Partner approval or Special Approval, to merge
or consolidate the Partnership with or into another entity if (A) the General Partner has
received an Opinion of Counsel that the merger or consolidation, as the case may be, would
not result in the loss of the limited liability of any Limited Partner or cause the
Partnership to be treated as an association taxable as a corporation or otherwise to be
taxed as an entity for federal income tax purposes (to the extent not previously treated as
such), (B) the merger or consolidation would not result in an amendment to the Partnership
Agreement, other than any amendments that could be adopted pursuant to Section 13.1,
(C) the Partnership is the Surviving Business Entity in such merger or consolidation, (D)
each Unit outstanding immediately prior to the effective date of the merger or consolidation
is to be an identical Unit of the Partnership after the effective date of the merger or
consolidation, (E) the number of Partnership Securities to be issued by the Partnership in
such merger or consolidation do not exceed 20% of the Partnership Securities Outstanding
immediately prior to the effective date of such merger or consolidation, and (F) Section
4.6(c)(iv) is not affected thereby.
48
14.4 Certificate of Merger. Upon the required approval by the General Partner and the 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.
14.5 Effect of Merger, Consolidation or Conversion
(a) At the effective time 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 those 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 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 is not in any way impaired
because of the merger or consolidation;
(iii) all rights of creditors and all liens on or security interests 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) At the effective time of the articles of conversion:
(i) the Partnership shall continue to exist, without interruption, but in the
organizational form of the converted entity rather than in its prior organizational
form;
(ii) all rights, title, and interests to all real estate and other property
owned by the Partnership shall continue to be owned by the converted entity in its
new organizational form without reversion or impairment, without further act or
deed, and without any transfer or assignment having occurred, but subject to any
existing liens or other encumbrances thereon;
(iii) all liabilities and obligations of the Partnership shall continue to be
liabilities and obligations of the converted entity in its new organizational form
without impairment or diminution by reason of the conversion;
(iv) all rights of creditors or other parties with respect to or against the
prior interest holders or other owners of the Partnership in their capacities as
such in existence as of the effective time of the conversion will continue in
existence as to those liabilities and obligations and may be pursued by such
creditors and obligees as if the conversion did not occur;
(v) a proceeding pending by or against the Partnership or by or against any of
Partners in their capacities as such may be continued by or against the converted
entity in its new organizational form and by or against the prior partners without
any need for substitution of parties; and
(vi) the Partnership Units that are to be converted into partnership interests,
shares, evidences of ownership, or other securities in the converted entity as
provided in the Plan of Conversion shall be so converted, and Partners shall be
entitled only to the rights provided in the Plan of Conversion.
49
(c) A merger, consolidation or conversion effected pursuant to this Article shall not
be deemed to result in a transfer or assignment of assets or liabilities from one entity to
another.
14.6 Amendment of Partnership Agreement. Pursuant to Section 17-211(g) of the Delaware Act and the
terms of this Article XIV, an agreement of merger or consolidation approved in accordance with
Section 17-211(b) of the Delaware Act may (a) effect any amendment to this Agreement or (b) effect
the adoption of a new partnership agreement for a limited partnership if it is the Surviving
Business Entity. Any such amendment or adoption made pursuant to this Section 14.6 shall
be effective at the effective time or date of the merger or consolidation.
ARTICLE XV
Right to Acquire Limited Partner Interests
Right to Acquire Limited Partner Interests
15.1 Right to Acquire Limited Partner Interests.
(a) Notwithstanding any other provision of this Agreement, if at any time less than 20%
of the total Limited Partner Interests of any class then Outstanding is 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 in whole or in part to the Partnership or any
Affiliate of the General Partner, exercisable at its option, to purchase all, but not less
than all, of such Limited Partner Interests of such class then Outstanding held by Persons
other than the General Partner and its Affiliates, at the greater of (x) the Current Market
Price as of the date three days prior to the date that the notice described in Section
15.1(b) is mailed and (y) the highest price paid by the General Partner or any of its
Affiliates for any such Limited Partner Interest of such class purchased during the 90-day
period preceding the date that the notice described in Section 15.1(b) is mailed. As
used in this Agreement, (i) “Current Market Price” as of any date of any class of
Limited Partner Interests listed or admitted to trading on any National Securities Exchange
means the average of the daily Closing Prices (as hereinafter defined) per limited partner
interest of such class for the 20 consecutive Trading Days (as hereinafter defined)
immediately prior to 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 for trading on the principal National
Securities Exchange (other than the Nasdaq Stock Market) on which such Limited Partner
Interests of such class are listed or admitted to trading or, if such Limited Partner
Interests of such class are not listed or admitted to trading on any National Securities
Exchange (other than the Nasdaq Stock Market), 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 Stock Market or such other system then in
use, or, if on any such day such Limited Partner Interests of such class are not quoted by
any such organization, the average of the closing bid and asked prices on such day as
furnished by a professional market maker making a market in such Limited Partner Interests
of such class selected by the General Partner, or if on any such day no market maker is
making a market in such Limited Partner Interests of such class, the fair value of such
Limited Partner Interests on such day as determined by the General Partner; and (iii)
“Trading Day” means a day on which the principal National Securities Exchange on
which such Limited Partner Interests of any class are listed or admitted to trading is open
for the transaction of business or, if Limited Partner Interests 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.
(b) If the General Partner elects to exercise the right to purchase Limited Partner
Interests granted pursuant to Section 15.1(a), the General Partner shall deliver to
the Transfer Agent 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 Limited Partner Interests of such class (as of a Record
Date selected by the General Partner) at least 10, but not more than 60, days prior to the
Purchase Date. Such Notice of Election to Purchase shall also be published for a period of
at least three consecutive days in at least two 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 15.1(a)) at which Limited Partner Interests will be
purchased and state that the General Partner, its Affiliate or the Partnership, as the case
may be, elects to purchase such Limited Partner Interests, upon surrender of Certificates
representing such Limited Partner Interests in exchange for
50
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 Limited Partner Interests are listed or
admitted to trading. Any such Notice of Election to Purchase mailed to a Record Holder of
Limited Partner Interests at his address as reflected in the records of the Transfer Agent
shall be conclusively presumed to have been given regardless of whether 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 such Limited Partner Interests to
be purchased in accordance with this Section 15.1. If the Notice of Election to
Purchase shall have been duly given as aforesaid at least 10 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 Limited Partner Interests subject
to purchase as provided herein, then from and after the Purchase Date, notwithstanding that
any Certificate shall not have been surrendered for purchase, all rights of the holders of
such Limited Partner Interests (including any rights pursuant to Articles IV,
V, VI, and XII) shall thereupon cease, except the right to receive
the purchase price (determined in accordance with Section 15.1(a)) for Limited
Partner Interests therefor, without interest, upon surrender to the Transfer Agent of the
Certificates representing such Limited Partner Interests, and such Limited Partner Interests
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 Limited Partner
Interests from and after the Purchase Date and shall have all rights as the owner of such
Limited Partner Interests (including all rights as owner of such Limited Partner Interests
pursuant to Articles IV, V, VI and XII).
(c) At any time from and after the Purchase Date, a holder of an Outstanding Limited
Partner Interest subject to purchase as provided in this Section 15.1 may surrender
his Certificate evidencing such Limited Partner Interest to the Transfer Agent in exchange
for payment of the amount described in Section 15.1(a), therefor, without interest
thereon.
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ARTICLE XVI
General Provisions
General Provisions
16.1 Addresses and Notices. Any notice, demand, request, report or proxy materials required or
permitted to be given or made to a Partner under this Agreement shall be in writing and shall be
deemed given or made when delivered in person or when sent by first class United States mail or by
other means of written communication to the Partner at the address described below. Any notice,
payment or report to be given or made to a Partner hereunder shall be deemed conclusively to have
been given or made, and the obligation to give such notice or report or to make such payment shall
be deemed conclusively to have been fully satisfied, upon sending of such notice, payment or report
to the Record Holder of such Partnership Securities 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 Partnership Securities by reason of any assignment or
otherwise. An affidavit or certificate of making of any notice, payment or report in accordance
with the provisions of this Section 16.1 executed by the General Partner, the Transfer
Agent or the mailing organization shall be prima facie evidence of the giving or making of such
notice, payment or report. If any notice, payment or report addressed to a 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 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. 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
2.3. The General Partner may rely and shall be protected in relying on any notice or other
document from a Partner or other Person if believed by it to be genuine.
16.2 Further Action. The parties shall execute and deliver all documents, provide all information and
take or refrain from taking action as may be necessary or appropriate to achieve the purposes of
this Agreement.
16.3 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.
16.4 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.
16.5 Creditors. None of the provisions of this Agreement shall be for the benefit of, or shall be
enforceable by, any creditor of the Partnership.
16.6 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 waiver of any such breach of any other covenant, duty, agreement or
condition.
16.7 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
Limited Partner Interest pursuant to Section 10.1(a) without execution hereof.
16.8 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.
16.9 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.
16.10 Consent of Partners. Each Partner hereby expressly consents and agrees that, whenever in this
Agreement it is specified that an action may be taken upon the affirmative vote or consent of less
than all of the Partners,
52
such
action may be so taken upon the concurrence of less than all of the Partners and each Partner shall
be bound by the results of such action.
53
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.
GENERAL PARTNER: | ||||||||
DEP HOLDINGS, LLC | ||||||||
By: | /s/ Xxxxxxx X. Xxxxxxxx | |||||||
President and Chief Executive Officer | ||||||||
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 or without execution pursuant to Section 10.1(a) hereof. | ||||||||
By: DEP HOLDINGS, LLC | ||||||||
General Partner, as attorney-in-fact for the Limited Partners pursuant to the Powers of Attorney granted pursuant to Section 2.6. |
By: | /s/ Xxxxxxx X. Xxxxxxxx | |||||
President and Chief Executive Officer |
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Attachment I
DEFINED TERMS
“Adjusted Capital Account” means the Capital Account maintained for each Partner as of the end
of each fiscal 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) 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 fiscal
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 fiscal 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 6.1(c)(i) or 6.1(c)(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” of a Partner in respect of a General Partner Interest, a Common Unit or any other
specified interest in the Partnership shall be the amount which such Adjusted Capital Account would
be if such General Partner Interest, Common Unit or other interest in the Partnership were the only
interest in the Partnership held by a Partner from and after the date on which such General Partner
Interest, Common Unit or other interest was first issued.
“Adjusted Property” means any property the Carrying Value of which has been adjusted pursuant
to Section 5.5(d)(i) or 5.5(d)(ii). Once an Adjusted Property is deemed contributed
to a new partnership in exchange for an interest in the new partnership, followed by the deemed
liquidation of the Partnership for federal income tax purposes upon a termination of the
Partnership pursuant to Treasury Regulation Section 1.708-(b)(1)(iv), such property shall
thereafter constitute a Contributed Property until the Carrying Value of such property is
subsequently adjusted pursuant to Section 5.5(d)(i) or 5.5(d)(ii).
“Administrative Services Agreement” means the Fourth Amended and Restated Administrative
Services Agreement, dated as of January 30, 2007, but effective as of February 5, 2007, by and
among EPCO, EPE, the EPE GP, the MLP, Enterprise OLP, the MLP General Partner, Enterprise OLP GP,
the Partnership, the General Partner, the Operating Partnership, the Operating General Partner,
TEPPCO, the TEPPCO General Partner and certain other parties thereto, as it may be amended,
supplemented or restated from time to time.
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly
through one or more intermediaries controls, is controlled by or is under common control with, the
Person in question. As used herein, the term “control” means the possession, direct or indirect, 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. Notwithstanding the foregoing, a
Person shall only be considered an “Affiliate” of the General Partner if (i) such Person owns,
directly or indirectly, 50% or more of the voting securities of the General Partner or otherwise
possesses the sole power to direct or cause the direction of the management and policies of the
General Partner or (ii) such Person is under common control with the Person in clause (i).
“Agreed Allocation” means any allocation, other than a Required Allocation, of an item of
income, gain, loss or deduction pursuant to the provisions of Section 6.1, including a
Curative Allocation (if appropriate to the context in which the term “Agreed Allocation” is used).
“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. The General
Partner shall use such method as it determines to be appropriate to allocate the aggregate Agreed
Value of Contributed Properties contributed to the Partnership in a single or integrated
transaction among each separate property on a basis proportional to the fair market value of each
Contributed Property.
“Agreement” means this Amended and Restated Agreement of Limited Partnership of Xxxxxx Energy
Partners L.P., as it may be amended, supplemented or restated from time to time.
I-1
“Associate” means, when used to indicate a relationship with any Person, (a) any corporation
or organization of which such Person is a director, officer or partner or is, directly or
indirectly, the owner of 20% or more of any class of voting stock or other voting interest; (b) any
trust or other estate in which such Person has at least a 20% beneficial interest or as to which
such Person serves as trustee or in a similar fiduciary capacity; and (c) any relative or spouse of
such Person, or any relative of such spouse, who has the same principal residence as such Person.
“Audit and Conflicts Committee” means a committee of the Board of Directors of the General
Partner composed entirely of three or more directors who meet the independence, qualification and
experience requirements established by the Securities Exchange Act and the rules and regulations of
the Commission thereunder and by the New York Stock Exchange.
“Available Cash” means, with respect to any Quarter ending prior to the Liquidation Date:
(a) all cash and cash equivalents of the Partnership Group on hand on the date of
determination of Available Cash with respect to such Quarter, less
(b) the amount of any cash reserves established by the General Partner (i) to provide
for the proper conduct of the business of the Partnership Group (including reserves for
future capital expenditures and for anticipated future credit needs of the Partnership
Group) subsequent to such Quarter, (ii) to comply with applicable law or any loan
agreement, security agreement, mortgage, debt instrument or other agreement or obligation to
which any Group Member is a party of by which it is bound or its assets are subject or (iii)
to provide funds for distributions under Section 6.3 in respect to any one or more of the
next four Quarters; provided, however, that disbursements made by a Group Member or cash
reserves established, increased or reduced after the end of such Quarter but on or before
the date of determination of Available Cash with respect to such Quarter shall be deemed to
have been made, established, increased or reduced, for purposes of determining Available
Cash, within such Quarter if the General Partner so determines.
Notwithstanding the foregoing, “Available Cash” with respect to the Quarter in which the
Liquidation Date occurs and any subsequent Quarter shall equal zero.
“Board of Directors” means, with respect to the Board of Directors of the General Partner, its
board of directors or managers, as applicable, if a corporation or limited liability company, or if
a limited partnership, the board of directors or board of managers of the general partner of the
General Partner.
“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 5.5 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 of America or the states of New York or
Texas shall not be regarded as a Business Day.
“Capital Account” means the capital account maintained for a Partner pursuant to Section
5.5. The “Capital Account” of a Partner in respect of a General Partner Interest, a Common Unit
or any other Partnership Interest shall be the amount which such Capital Account would be if such
General Partner Interest, Common Unit or other Partnership Interest were the only interest in the
Partnership held by a Partner from and after the date on which such General Partner Interest,
Common Unit or other Partnership Interest was first issued.
“Capital Contribution” means any cash, cash equivalents or the Net Agreed Value of Contributed
Property that a Partner contributes to the Partnership.
“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 in respect of such Contributed Property, and
(b) with respect to any other Partnership property, the adjusted basis of such
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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 5.5(d)(i)
and 5.5(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.
“Cause” means a court of competent jurisdiction has entered a final, non-appealable judgment
finding the General Partner liable for actual fraud or willful misconduct in its capacity as
general partner of the Partnership.
“Certificate” means (a) a certificate (i) substantially in the form of Exhibit A to
this Agreement, (ii) issued in global form in accordance with the rules and regulations of the
Depositary or (iii) in such other form as may be adopted by the General Partner, issued by the
Partnership evidencing ownership of one or more Common Units, or (b) a certificate, in such form as
may be adopted by the General Partner, issued by the Partnership evidencing ownership of one or
more other Partnership Securities.
“Certificate of Limited Partnership” means the Certificate of Limited Partnership of the
Partnership filed with the Secretary of State of the State of Delaware as referenced in Section
2.1, as such Certificate of Limited Partnership may be amended, supplemented or restated from
time to time.
“Citizenship Certification” means a properly completed certificate in such form as may be
specified by the General Partner by which 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.
“Claim” has the meaning assigned to such term in Section 7.12(c).
“Closing Date” means the first date on which the Common Units are sold by the Partnership to
the Underwriters pursuant to the provisions of the Underwriting Agreement.
“Closing Price” has the meaning assigned to such term in Section 15.1(a).
“Code” means the Internal Revenue Code of 1986, as amended and in effect from time to time and
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
successor law.
“Commission” means the United States Securities and Exchange Commission.
“Common Unit” means a Partnership Security representing a fractional part of the Partnership
Interests of all Limited Partners and of the General Partner (exclusive of its interest as a holder
of a General Partner Interest) and having the rights and obligations specified with respect to
Common Units in this Agreement.
“Contributed Property” means each property or other asset, in such form as may be permitted by
the Delaware Act, but excluding cash, contributed to the Partnership. Once the Carrying Value of a
Contributed Property is adjusted pursuant to Section 5.5(d), such property shall no longer
constitute a Contributed Property, but shall be deemed an Adjusted Property.
“Contribution Agreement” means the Contribution, Conveyance and Assignment Agreement by and
among Enterprise OLP, the Partnership, the General Partner, the OLP and the Operating General
Partner dated as of the date of this Agreement.
“Curative Allocation” means any allocation of an item of income, gain, deduction, loss or
credit pursuant to the provisions of Section 6.1(b)(ix).
“Current Market Price” has the meaning assigned to such term in Section 15.1(a).
“Delaware Act” means the Delaware Revised Uniform Limited Partnership Act, 6 Del C. Section
17-101, et seq., as amended, supplemented or restated from time to time, and any successor to such
statute.
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“Departing General 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 11.1 or
11.2.
“Depositary” means, with respect to any Units issued in global form, The Depository Trust
Company and its successors and permitted assigns.
“Xxxxxx” means, collectively, individually or in any combination, Xxx X. Xxxxxx, his wife,
descendants, heirs and/or legatees and/or distributees of Xxx X. Xxxxxx’x estate, and/or trusts
established for the benefit of his wife, descendants, such legatees and/or distributees and/or
their respective descendants, heirs, legatees and distributees.
“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 any Group Member does business or proposes to do business from time to time, and whose
status as a Limited Partner does not or would not subject such Group Member to a significant risk
of cancellation or forfeiture of any of its properties or any interest therein, as determined by
the General Partner.
“Enterprise OLP” means Enterprise Products Operating L.P., a Delaware limited partnership, and
its successors and permitted assignees.
“Enterprise OLP GP” means Enterprise Products OLP GP, Inc., a Delaware corporation and wholly
owned subsidiary of the MLP, and any successors and permitted assigns as the general partner of the
Enterprise OLP.
“EPCO” means EPCO, Inc. (formerly, Enterprise Products Company), a Texas Subchapter S
corporation.
“EPE” means Enterprise GP Holdings L.P., a Delaware limited partnership, and any successors
thereto.
“EPE GP” means EPE Holdings LLC, a Delaware limited liability company, and its successors and
permitted assigns as general partner of EPE.
“Event of Withdrawal” has the meaning assigned to such term in Section 11.1(a).
“General Partner” means DEP Holdings, LLC, a Delaware limited liability company, and its
successors and permitted assigns that are admitted to the Partnership as general partner of the
Partnership, in its capacity as general partner of the Partnership (except as the context otherwise
requires).
“General Partner Interest” means the management and ownership interest, if any, of the General
Partner in the Partnership (in its capacity as a general partner without reference to any Limited
Partner Interest held by it) which may be evidenced by Partnership Securities or a combination
thereof or interest therein, and includes any and all benefits to which the General Partner is
entitled as provided in this Agreement, together with all obligations of the General Partner to
comply with the terms and provisions of this Agreement.
“General Partner Unit” means a fractional part of the General Partner Interest having the
rights and obligations specified with respect to the General Partner Interest, which are used
solely as a notional amount for purposes of making calculations under this Agreement with respect
to determining a Percentage Interest. A General Partner Unit is not a Unit.
“Group” means a Person that with or through any of its Affiliates or Associates has any
contract, arrangement, understanding or relationship for the purpose of acquiring, holding, voting
(except voting pursuant to a revocable proxy or consent given to such Person in response to a proxy
or consent solicitation made to 10 or more Persons), exercising investment power or disposing of
any Partnership Securities with any other Person that beneficially owns, or whose Affiliates or
Associates beneficially own, directly or indirectly, Partnership Interests.
“Group Member” means a member of the Partnership Group.
“Group Member Agreement” means the partnership agreement of any Group Member, other than the
Partnership, that is a limited or general partnership, the limited liability company agreement of
any Group Member that is a limited
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liability company, the certificate of incorporation and bylaws or similar organizational
documents of any Group Member that is a corporation, the joint venture agreement or similar
governing document of any Group Member that is a joint venture and the governing or organizational
or similar documents of any other Group Member that is a Person other than a limited or general
partnership, limited liability company, corporation or joint venture, as such may be amended,
supplemented or restated from time to time.
“Holder” as used in Section 7.12, has the meaning assigned to such term in Section
7.12(a).
“Indemnified Persons” has the meaning assigned to such term in Section 7.12(c).
“Indemnitee” means (a) the General Partner, any Departing General Partner and any Person who
is or was an Affiliate of the General Partner or any Departing General Partner, (b) any Person who
is or was a member, director, officer, fiduciary or trustee of a Group Member, (c) any Person who
is or was an officer, member, partner, director or trustee of the General Partner or any Departing
General Partner or any Affiliate of the General Partner or any Departing General Partner, or any
Affiliate of any such Person and (d) any Person who is or was serving at the request of the General
Partner or any Departing General Partner or any such Affiliate as a director, officer, member,
partner, fiduciary or trustee of another Person; provided, that a Person shall not be an Indemnitee
by reason of providing, on a fee-for- services basis, trustee, fiduciary or custodial services, or
(e) any Person the General Partner designates as an “Indemnitee” for purposes of this Agreement.
“Initial Common Units” means the Common Units sold in the Initial Offering.
“Initial Offering” means the initial offering and sale of Common Units to the public, as
described in the Registration Statement.
“Initial Operating Subsidiaries” means (1) Mont Belvieu Caverns, LLC, a Delaware limited
liability company and successor of Mont Belvieu Caverns, LP, a Delaware limited partnership, (2)
South Texas NGL Pipelines, LLC, a Delaware limited liability company, (3) Acadian Gas, LLC, a
Delaware limited liability company, (4) Sabine Propylene Pipeline, L.P., a Delaware limited
partnership, and (5) Enterprise Xxx-Xxx Propylene Pipeline, L.P., a Delaware limited partnership.
“Issue Price” means the price at which a Unit is purchased from the Partnership, after taking
into account any sales commission or underwriting discount charged to the Partnership.
“Limited Partner” means, unless the context otherwise requires, Enterprise OLP as the initial
Limited Partner, each additional Person that becomes a Limited Partner pursuant to the terms of
this Agreement, each additional Limited Partner and any Departing General Partner upon the change
of its status from General Partner to Limited Partner pursuant to Section 11.3, in each
case, in such Person’s capacity as a limited partner of the Partnership.
“Limited Partner Interest” means the ownership interest of a Limited Partner in the
Partnership, which may be evidenced by Common Units or other Partnership Securities or a
combination thereof or interest therein, and includes any and all benefits to which such Limited
Partner is entitled as provided in this Agreement, together with all obligations of such Limited
Partner to comply with the terms and provisions of this Agreement.
“Liquidation Date” means (a) in the case of an event giving rise to the dissolution of the
Partnership of the type described in clauses (a) and (b) of the first sentence of
Section 12.2, the date on which the applicable time period during which the holders of
Outstanding Units have the right to elect to continue the business of the Partnership has expired
without such an election being made, and (b) in the case of any other event giving rise to the
dissolution of the Partnership, the date on which such event occurs.
“Liquidator” means one or more Persons selected by the General Partner to perform the
functions described in Section 12.3 as liquidating trustee of the Partnership within the
meaning of the Delaware Act.
“Merger Agreement” has the meaning assigned to such term in Section 14.1.
“MLP” means Enterprise Products Partners L.P., a Delaware limited partnership, and any
successors thereto.
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“MLP General Partner” means Enterprise Products GP, LLC, a Delaware limited liability company,
and its successors and permitted assigns as general partner of the MLP.
“MLP Partnership Agreement” means the Fifth Amended and Restated Agreement of Limited
Partnership of the MLP, as it may be amended or restated from time to time.
“National Securities Exchange” means an exchange registered with the Commission under Section
6(a) of the Securities Exchange Act or The Nasdaq National Market or any successor thereto.
“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 by the Partnership, the Partnership’s Carrying Value of such property (as
adjusted pursuant to Section 5.5(d)(ii)) at the time such property is distributed, reduced
by any indebtedness either assumed by such Partner upon such distribution or to which such property
is subject at the time of distribution, in either case, as determined under Section 752 of the
Code.
“Net Income” means, for any taxable year, the excess, if any, of the Partnership’s items of
income and gain (other than those items taken into account in the computation of Net Termination
Gain or Net Termination Loss) for such taxable year over the Partnership’s items of loss and
deduction (other than those items taken into account in the computation of Net Termination Gain or
Net Termination Loss) for such taxable year. The items included in the calculation of Net Income
shall be determined in accordance with Section 5.5(b) and shall not include any items
specially allocated under Section 6.1(c).
“Net Loss” means, for any taxable year, the excess, if any, of the Partnership’s items of loss
and deduction (other than those items taken into account in the computation of Net Termination Gain
or Net Termination Loss) for such taxable year over the Partnership’s items of income and gain
(other than those items taken into account in the computation of Net Termination Gain or Net
Termination Loss) for such taxable year. The items included in the calculation of Net Loss shall be
determined in accordance with Section 5.5(b) and shall not include any items specially
allocated under Section 6.1(c).
“Net Termination Gain” means, for any taxable year, the sum, if positive, of all items of
income, gain, loss or deduction recognized by the Partnership after the Liquidation Date. The items
included in the determination of Net Termination Gain shall be determined in accordance with
Section 5.5(b) and shall not include any items of income, gain or loss specially allocated
under Section 6.1(c).
“Net Termination Loss” means, for any taxable year, the sum, if negative, of all items of
income, gain, loss or deduction recognized by the Partnership after the Liquidation Date. The items
included in the determination of Net Termination Loss shall be determined in accordance with
Section 5.5(b) and shall not include any items of income, gain or loss specially allocated
under Section 6.1(c).
“Non-citizen Assignee” means a Person whom the General Partner has determined does not
constitute an Eligible Citizen and as to whose Partnership Interest the General Partner has become
substituted as the limited partner, pursuant to Section 4.8.
“Nonrecourse Built-in Gain” means with respect to any Contributed Properties or Adjusted
Properties that are subject to a mortgage or pledge securing a Nonrecourse Liability, the amount of
any taxable gain that would be allocated to the Partners pursuant to Sections 6.2(b)(i)(A),
6.2(b)(ii)(A) and 6.2(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 expenditures (described
in Section 705(a)(2)(B) of the Code) that, in accordance with the principles of Treasury Regulation
Section 1.704-2(b), are attributable to a Nonrecourse Liability.
“Nonrecourse Liability” has the meaning set forth in Treasury Regulation Section
1.752-1(a)(2).
“Notice of Election to Purchase” has the meaning assigned to such term in Section
15.1(b) hereof.
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“Organizational Limited Partner” means Enterprise OLP.
“Omnibus Agreement” means the Omnibus Agreement by and among Enterprise OLP, the General
Partner, the Partnership, the Operating Partnership, the Operating General Partner and the Initial
Operating Subsidiaries dated as of the date of this Agreement.
“Operating General Partner” means DEP OLPGP, LLC, a Delaware limited liability company and
wholly owned subsidiary of the Partnership, and any successors and permitted assigns as the general
partner of the Operating Partnership.
“Operating Partnership” means DEP Operating Partnership, L.P., a Delaware limited partnership,
and any successors thereto.
“Opinion of Counsel” means a written opinion of counsel (who may be regular counsel to the
Partnership or the General Partner or any of its Affiliates) acceptable to the General Partner.
“Option Closing Date” has the meaning assigned to such term in the Underwriting Agreement.
“Outstanding” means, with respect to Partnership Securities, all Partnership Securities that
are issued by the Partnership and reflected as outstanding on the Partnership’s books and records
as of the date of determination; provided, however, that, with respect to Partnership Securities,
if at any time any Person or Group (other than the General Partner or its Affiliates) beneficially
owns 20% or more of any Outstanding Partnership Securities of any class then Outstanding, all
Partnership Securities owned by such Person or Group shall not be voted on any matter and shall not
be considered to be Outstanding when sending notices of a meeting of Limited Partners to vote on
any matter (unless otherwise required by law), calculating required votes, determining the presence
of a quorum or for other similar purposes under this Agreement, except that Common Units so owned
shall be considered to be Outstanding for purposes of Section 11.1(b)(iv) (such Common
Units shall not, however, be treated as a separate class of Partnership Securities for purposes of
this Agreement); provided, further, that the foregoing limitation shall not apply to (i) any Person
or Group who acquired 20% or more of any Outstanding Partnership Securities of any class then
Outstanding directly from the General Partner or its Affiliates, (ii) to any Person or Group who
acquired 20% or more of any Outstanding Partnership Securities of any class then Outstanding
directly or indirectly from a Person or Group described in clause (i) provided that the
General Partner shall have notified such Person or Group in writing that such limitation shall not
apply or (iii) to any Person or Group who acquired 20% or more of any Partnership Securities issued
by the Partnership with the approval of the prior Board of Directors of the General Partner.
“Over-Allotment Option” means the over-allotment option granted to the Underwriters by the
Partnership pursuant to the Underwriting Agreement.
“Partner Nonrecourse Debt” has the meaning set forth in Treasury Regulation Section
1.704-2(b)(4).
“Partner Nonrecourse Debt Minimum Gain” has the meaning set forth in Treasury Regulation
Section 1.704-2(i)(2).
“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), are attributable to a Partner Nonrecourse
Debt.
“Partners” means the General Partner and the Limited Partners.
“Partnership” means Xxxxxx Energy Partners L.P., a Delaware limited partnership, and any
successors thereto.
“Partnership Group” means the Partnership, the Operating General Partner, the Operating
Partnership and any Subsidiary of any of these entities, treated as a single consolidated entity.
“Partnership Interest” means an ownership interest in the Partnership, which shall include
General Partner Interests and Limited Partner Interests.
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“Partnership Minimum Gain” means that amount determined in accordance with the principles of
Treasury Regulation Section 1.704-2(d).
“Partnership Security” means any class or series of equity interest in the Partnership (but
excluding any options, rights, warrants and appreciation rights relating to any equity interest in
the Partnership), including Units.
“Percentage Interest” means as of any date of determination (a) as to the General Partner with
respect to General Partner Units and as to any Unitholder with respect to Units, the product
obtained by multiplying (i) 100% less the percentage applicable to clause (b) below by (ii) the
quotient obtained by dividing (A) the number of General Partner Units held by the General Partner
or the number of Units held by such Unitholder, as the case may be, by (B) the total number of
Outstanding Units and all General Partner Units, and (b) as to holders of other Partnership
Securities issued by the Partnership in accordance with Section 5.6, the percentage established as
part of such issuance.
“Person” means an individual or a corporation, limited liability company, partnership, joint
venture, trust, unincorporated organization, association, government agency or political
subdivision thereof or other entity.
“Plan of Conversion” has the meaning ascribed thereto in Section 14.1.
“Pro Rata” means (a) when modifying Units or any class thereof, apportioned equally among all
designated Units in accordance with their relative Percentage Interests and (b) when modifying
Partners or Record Holders, apportioned among all Partners or Record Holders, as the case may be,
in accordance with their respective Percentage Interests.
“Purchase Date” means the date determined by the General Partner as the date for purchase of
all Outstanding Units (other than Units owned by the General Partner and its Affiliates) pursuant
to Article XV.
“Purchased Interest” has the meaning assigned to such term in Section 11.3(a).
“Quarter” means, unless the context requires otherwise, a fiscal quarter of the Partnership,
or with respect to the first fiscal quarter of the Partnership after the Closing Date, the portion
of such fiscal quarter after the Closing Date.
“Recapture Income” means any gain recognized by the Partnership (computed without regard to
any adjustment required by Sections 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 the Record Holders 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 lawful action of Limited Partners or (b)
the identity of Record Holders entitled to receive any report or distribution or to participate in
any offer.
“Record Holder” means the Person in whose name a Common Unit is registered on the books of the
Transfer Agent as of the opening of business on a particular Business Day, or with respect to other
Partnership Interests, the Person in whose name any such other Partnership Interest is registered
on the books that the General Partner has caused to be kept as of the opening of business on such
Business Day.
“Redeemable Interests” means any Partnership Interests for which a redemption notice has been
given, and has not been withdrawn, pursuant to Section 4.10.
“Registration Statement” means the Registration Statement on Form S-1 (Registration No.
333-138371) as it has been or as it may be amended or supplemented from time to time, filed by the
Partnership with the Commission under the Securities Act to register the offering and sale of the
Common Units in the Initial Offering.
“Required Allocations” means (a) any limitation imposed on any allocation of Net Losses or Net
Termination Losses under Section 6.1(a) or 6.1(b)(ii) and (b) any allocation of an
item of income, gain, loss or deduction pursuant to Section 6.1(c)(i), 6.1(c)(ii),
6.1(c)(iii), 6.1(c)(vi) or 6.1(c)(viii).
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“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 6.2(b)(i)(A) or 6.2(b)(ii)(A), respectively,
to eliminate Book-Tax Disparities.
“Securities Act” means the Securities Act of 1933, as amended, supplemented or restated from
time to time, and any successor to such statute.
“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended, supplemented
or restated from time to time, and any successor to such statute.
“Special Approval” means approval by a majority of the members of the Audit and Conflicts
Committee.
“Subsidiary” means, with respect to any Person, (a) a corporation of which more than 50% of
the voting power of shares entitled (without regard to the occurrence of any contingency) to vote
in the election of directors or other governing body of such corporation is owned, directly or
indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such
Person or a combination thereof, (b) a partnership (whether general or limited) or limited
liability company in which such Person or a Subsidiary of such Person is, at the date of
determination, a general or limited partner of such partnership or member of such limited liability
company, but only if more than 50% of the partnership interests of such partnership or membership
interests of such limited liability company (considering all of the partnership interests or
membership interests as a single class) is owned, directly or indirectly, at the date of
determination, by such Person, by one or more Subsidiaries of such Person, or a combination
thereof, or (c) any other Person (other than a corporation or a partnership) in which such Person,
one or more Subsidiaries of such Person, or a combination thereof, directly or indirectly, at the
date of determination, has (i) at least a majority ownership interest or (ii) the power to elect or
direct the election of a majority of the directors or other governing body of such Person.
“Surviving Business Entity” has the meaning assigned to such term in Section 14.2(b).
“TEPPCO” means TEPPCO Partners, L.P., a Delaware limited partnership, and any successors
thereto.
“TEPPCO General Partner” means Texas Eastern Products Pipeline Company, LLC, a Delaware
limited liability company, and any successors thereto.
“Trading Day” has the meaning assigned to such term in Section 15.1(a).
“transfer” has the meaning assigned to such term in Section 4.4(a).
“Transfer Agent” means such bank, trust company or other Person (including 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 and as may be appointed from time to time by the
Partnership to act as registrar and transfer agent for any other Partnership Securities; provided,
that if no Transfer Agent is specifically designated for any such other Partnership Securities, the
General Partner shall act in such capacity.
“Underwriter” means each Person named as an underwriter in Schedule 1 to the Underwriting
Agreement who purchases Common Units pursuant thereto.
“Underwriting Agreement” means the Underwriting Agreement dated January 30, 2007, among the
Underwriters, the Partnership and certain other parties, providing for the purchase of Common Units
by such Underwriters.
“Unit” means a Partnership Security that is designated as a ‘‘Unit’’ and shall include Common
Units but shall not include a General Partner Interest; provided, that each Common Unit at any time
Outstanding shall represent the same fractional part of the Partnership Interests of all Limited
Partners holding Common Units as each other Common Unit.
“Unitholders” means the holders of Units.
“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
(as determined under Section 5.5(d)) over (b)
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the Carrying Value of such property as of such date (prior to any adjustment to be made
pursuant to Section 5.5(d) as of such date).
“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 5.5(d) as of such date) over (b)
the fair market value of such property as of such date (as determined under Section
5.5(d)).
“U.S. GAAP” means United States generally accepted accounting principles consistently applied.
“Withdrawal Opinion of Counsel” has the meaning assigned to such term in Section
11.1(b).
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EXHIBIT A
FORM OF CERTIFICATE EVIDENCING COMMON UNITS
REPRESENTING LIMITED PARTNER INTERESTS IN
NUMBER
|
UNITS | |
THIS CERTIFICATE IS TRANSFERABLE IN NEW YORK, N.Y. AND JERSEY CITY, N.J. |
CUSIP 265026 10 4 SEE REVERSE FOR CERTAIN DEFINITIONS |
XXXXXX ENERGY PARTNERS L.P.
A LIMITED PARTNERSHIP FORMED UNDER THE LAWS OF DELAWARE
A LIMITED PARTNERSHIP FORMED UNDER THE LAWS OF DELAWARE
In accordance with Section 4.1 of the Amended and Restated Agreement of Limited Partnership of
Xxxxxx Energy Partners L.P., as amended, supplemented or restated from time to time (the
“Partnership Agreement”), Xxxxxx Energy Partners L.P., a Delaware limited partnership (the
“Partnership”), hereby certifies that [ ] (the “Holder”) is the registered
owner of 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. 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 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 0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxx, 00000 or such other address as may be
specified by notice under the Partnership Agreement. 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 (i) requested admission as, and
agreed to become, a Limited Partner and to have agreed to comply with and be bound by and to have
executed the Partnership Agreement, (ii) 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, (iii) granted the powers of attorney provided for in the Partnership Agreement, and (iv)
made the waivers and given the consents and approvals contained in the Partnership Agreement.
THE HOLDER OF THIS SECURITY ACKNOWLEDGES FOR THE BENEFIT OF XXXXXX ENERGY PARTNERS L.P. THAT
THIS SECURITY MAY NOT BE SOLD, OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED 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
AUTHORITY WITH JURISDICTION OVER SUCH TRANSFER, (B) TERMINATE THE EXISTENCE OR QUALIFICATION OF
XXXXXX ENERGY PARTNERS L.P. UNDER THE LAWS OF THE STATE OF DELAWARE, OR (C) CAUSE XXXXXX ENERGY
PARTNERS L.P. TO BE TREATED AS AN ASSOCIATION TAXABLE AS A CORPORATION OR OTHERWISE TO BE TAXED AS
AN ENTITY FOR FEDERAL INCOME TAX PURPOSES (TO THE EXTENT NOT ALREADY SO TREATED OR TAXED). DEP
HOLDINGS, LLC, THE GENERAL PARTNER OF XXXXXX ENERGY PARTNERS L.P., MAY IMPOSE ADDITIONAL
RESTRICTIONS ON THE TRANSFER OF THIS SECURITY IF IT RECEIVES AN OPINION OF COUNSEL THAT SUCH
RESTRICTIONS ARE NECESSARY TO AVOID A SIGNIFICANT RISK OF XXXXXX ENERGY PARTNERS L.P. BECOMING
TAXABLE AS A CORPORATION OR OTHERWISE BECOMING TAXABLE AS AN ENTITY FOR FEDERAL INCOME TAX
PURPOSES. THE RESTRICTIONS SET FORTH ABOVE SHALL NOT PRECLUDE THE SETTLEMENT OF ANY TRANSACTIONS
INVOLVING
Exhibit A-1
THIS SECURITY ENTERED INTO THROUGH THE FACILITIES OF ANY NATIONAL SECURITIES EXCHANGE ON WHICH
THIS SECURITY IS LISTED OR ADMITTED TO TRADING.
This Certificate shall be governed by, and construed in accordance with, the laws of the State
of Delaware, without regard to principles of conflict of laws thereof.
This Certificate shall not be valid for any purpose unless it has been countersigned and
registered by the Transfer Agent and Registrar.
Dated: |
||||||||||
Xxxxxx Energy Partners L.P., By: DEP Holdings, LLC, its general partner |
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Countersigned and Registered by: | ||||||||||
By: | ||||||||||
Mellon Investor Services LLC as Transfer Agent and Registrar |
Xxxxxxx X. Xxxxxxxx President and Chief Executive Officer |
|||||||||
By:
|
By: | |||||||||
Authorized Signature | Xxxxxxxxx Xxxxxxxxxxx Secretary |
Exhibit A-2
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 common | UNIF GIFT/TRANSFERS MIN ACT | ||
TEN ENT—
|
as tenants by the entireties | Custodian (Cust) (Minor) |
||
JT TEN—
|
as joint tenants with right of survivorship and not as tenants in common | under Uniform Gifts/Transfers to Minors Act (State) |
Additional abbreviations, though not in the above list, may also be used.
ASSIGNMENT OF COMMON UNITS
IN
XXXXXX ENERGY PARTNERS L.P.
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 Xxxxxx 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. | ||||
SIGNATURE(S) MUST BE GUARANTEED BY A
MEMBER FIRM OF THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS,
INC. OR BY A COMMERCIAL BANK OR
TRUST COMPANY SIGNATURE(S)
GUARANTEED
|
||||
(Signature) |
No transfer of the Common Units evidenced hereby will be registered on the books of the
Partnership, unless the Certificate evidencing the Common Units to be transferred is surrendered
for registration of transfer.
Exhibit A-3