AMENDMENT NO. 2 TO THE
AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP OF
NATIONAL PROPANE, L.P.
This Amendment No. 2 to the Amended and Restated Agreement of Limited
Partnership of National Propane, L.P. (the "Partnership") is hereby made and is
effective as of this 28th day of December, 1997, by and among National Propane
Corporation, a Delaware corporation, as the Managing General Partner, National
Propane SGP, Inc., a Delaware corporation, as the Special General Partner, and
the limited partner of the Partnership.
W1TNESSETH:
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WHEREAS, the Partnership was heretofore formed and now exists pursuant to
the Amended and Restated Agreement of Limited Partnership of National Propane,
L.P., dated as of July 2, 1996, as amended (the "Partnership Agreement"); and
WHEREAS, Section 13.1 of the Partnership Agreement provides procedures for
the amendment of the Partnership Agreement by the Managing General Partner
without obtaining the approval of any Partner; and
WHEREAS, the Managing General Partner proposes to adopt amendments to the
Partnership Agreement pursuant to the authority granted in such Section 13.1.
AGREEMENT
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NOW, THEREFORE, it is agreed as follows:
1. Capitalized terms used herein but not defined shall have the meanings
assigned to them in the Partnership Agreement.
2. Section 11.3 of the Partnership Agreement is hereby amended by deleting
the current Section 11.3 in its entirety and substituting in lieu thereof the
following:
11.3 Interest of Departing Partner and Successor General Partner.
(a) If the Managing General Partner is removed as Managing General Partner
of the MLP pursuant to the provisions of Section 11.2 of the MLP Agreement,
then. unless the Managing General Partner makes the election provided in the
last paragraph of Section 11.3(a) of the MLP Agreement with respect to all or
any portion of its Partnership Interest as a General Partner of the Partnership,
that portion of the Partnership Interest of the Managing General Partner as to
which no
such election is made (the "Converted GP Interest") shall be converted into a
non-voting limited partner interest in the Partnership (the "Retained LP
Interest") having an interest in the profits and losses of the Partnership equal
to that attributable to the Converted GP Interest. For purposes of this
Agreement, conversion of the Converted GP Interest will be characterized as if
the Managing General Partner contributed the Converted GP Interest in the
Partnership to the Partnership in exchange for the Retained LP Interest.
(b) The Partnership Interest of a Departing Partner departing as a result
of withdrawal or removal pursuant to Section 11.1 or 11.2 (other than the
Retained LP Interest) shall (unless it is otherwise required to be converted
into Common Units pursuant to Section 11.3(b) of the MLP Agreement or 11.1(d)
of this Agreement) be purchased by the successor to the Departing Partner
for cash in the manner specified in the MLP Agreement. Such purchase (or
conversion into Common Units, as applicable) shall be a condition to the
admission to the Partnership of the successor as the General Partner.
(c) Any successor General Partner shall, except to the extent that it is
inconsistent with the provisions of Section 11.4, indemnify the Departing
Partner as to all debts and liabilities of the Partnership arising on or after
the effective date of the withdrawal or removal of the Departing Partner.
(d) The Departing Partner, including the Managing General Partner upon
removal, shall be entitled to receive all reimbursements due such Departing
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 such Departing Partner for the benefit of the
Partnership.
3. Section 11.4 of the Partnership Agreement is hereby amended by
renumbering it as new Section 11.5 and a new Section 11.4 is added as follows:
11.4 Indemnification and Covenants upon Removal of Managing General
Partner.
(a) Indemnification by Removed Partner. If, following the removal ofthe
Managing General Partner as provided in Section 11.2, all or a portion of the
Partnership Interest of the removed Managing General Partner (the "Removed
Partner") is converted into a non-voting limited partner Partnership Interest as
provided in Section 11.3(a), then, from and after the effective date of removal
of the Removed Partner (the "Removal Date"), the Removed Partner, to the fullest
extent permitted by law, shall indemnify and hold harmless any successor General
Partner (whether one or more) from and against any and all losses, costs,
damages, expenses, liabilities and claims arising or resulting from, or relating
to any payments that any successor General Partner, in its capacity as the
General Partner of the Partnership,
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is required to make (and makes) from its own funds (after prior recourse is had
to the assets of the Partnership) with respect to the debt of the Partnership
(including accounts payable or other trade payables) reflected on the books and
records of the Partnership as of the effective time of the Removal Date and any
refinancing, refunding or replacement thereof (the "Indemnified Debt"), due to
the inability of the Partnership to pay or refinance any such Indemnified Debt
from the assets of the Partnership. The indemnity by the Removed Partner
described in this Section 11.4 (the "Removed Partner Debt Indemnity") shall not
exceed the Outstanding Indemnified Debt Amount determined for the Removed
Partner for any fiscal year. Except to the extent otherwise required by law, the
Removed Partner Debt Indemnity shall terminate at the time that the amount of
the Removed Partner's Outstanding Indemnified Debt Amount is reduced to zero.
The Removed Partner shall be subrogated to the rights of a successor General
Partner to the extent that the Removed Partner has made any payment to such
successor General Partner in respect of its Removed Partner Debt Indemnity.
(b) Covenants of Successor General Partner. During the period commencing on
the Removal Date and ending on the fifth anniversary of the Removal Date but
in any event subject to Section 11.4(c):
(i) each successor General Partner, for itself and on behalf of the
Partnership, covenants that it shall not, and shall cause the Partnership or any
other Person not to, do any of the following if it would result in the Allocable
Indemnified Debt being reduced below the Outstanding Indemnified Debt Amount:
(A) prepay, defease, purchase or otherwise retire any of the Indemnified Debt
(unless such Indemnified Debt is simultaneously replaced with an equivalent
amount of new Indemnified Debt), (B) modify any of the Indemnified Debt so as to
eliminate or limit the recourse liability of the Partnership or any successor
General Partner in its capacity as a general partner of the Partnership with
respect thereto, (C) cause the Partnership to merge or consolidate with or
otherwise become a corporation or limited liability company for federal income
tax purposes, (D) cause or permit any other Person (other than the Partnership
or any successor General Partner) to assume, guarantee, indemnify against or
otherwise incur any liability with respect to any Indemnified Debt, or (E) take
or fail to take any other action similar to the foregoing;
(ii) each successor General Partner, for itself and on behalf of the
Partnership, covenants that it shall cause the Partnership or its successor (x)
to not redeem the Retained LP Interest or take similar action and (y) to
continue in existence and to remain subject to Indemnified Debt, and/or use its
reasonable best efforts to cause the Partnership to refinance scheduled
principal payments on the Indemnified Debt with sufficient recourse debt so that
at any time until the termination of the Removed Partner Debt Indemnity pursuant
to Section 11.4(a) hereof, the Allocable Indemnified Debt as of such time will
not be reduced below the
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Outstanding Indemnified Debt Amount determined as of such time;
(iii) each successor General Partner, for itself and on behalf of the
Partnership, covenants that it shall use its reasonable best efforts to cause
the Partnership to not take or omit to take any action, if such action or
omission (with the giving of notice or the passing of time, or both) would
constitute a breach of, or give rise to a default or event of default under, any
Indemnified Debt.
(iv) the Removed Partner shall have all remedies available at law and in
equity for a default in the provisions of this Section 11.4(b) and by a
successor General Partner, and any successor General Partner, by executing this
Agreement, acknowledges that specific performance is available as a remedy and
may be the only adequate remedy in the event that such successor General Partner
defaults on its obligations undertaken pursuant to this Section 11.4(b).
(c) Exceptions. Notwithstanding the covenants contained in Section 11.4(b):
(i) a successor General Partner shall not be required to comply with
Section 11.4(b) if the action or event that would otherwise cause a violation
or breach of one or more of the covenants contained in Section 11.4(b) has been
previously approved by holders of 66 2/3%or more of the outstanding Units of the
MLP (including any Units held by the Removed Partner or its Affiliates); and
(ii) nothing contained in Section 11.4(b) shall prevent the Partnership or
the MLP from consummating any acquisition, merger or consolidation or sale or
other transfer of the assets of the Partnership or the MLP unless such
acquisition, merger or consolidation or sale or other transfer is undertaken
with a principal purpose of avoiding the application of Section 11.4(b).
(d) Reports. From and after the Removal Date and until the termination of
the Removed Partner Debt Indemnity pursuant to Section 11.4(a), a successor
General Partner shall furnish to the Removed Partner, (i) within 30 days after
the end of each fiscal quarter, a certificate of the chief financial officer of
such successor General Partner, or equivalent officer, stating that (A) the
Allocable Indemnified Debt as of the end of such fiscal quarter is not, and has
not been during the fiscal quarter, less than the Outstanding Indemnified Debt
Amount as of such time, and (B) no event that constitutes, or with the passing
of time or the giving of notice, or both. would reasonably be expected to
constitute, an event of default under any Indemnified Debt has occurred, or if
any such event has occurred, describing such event and the action such successor
General Partner intends to take with respect thereto, (ii) concurrently with
providing them to the lenders, agents or trustees in respect of the Indemnified
Debt, copies of any compliance certificates, together with
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any attachments thereto, required pursuant to any Indemnified Debt, (iii)
promptly upon obtaining knowledge thereof, a description, in reasonable detail,
of any event that constitutes, or with the passing of time or the giving of
notice, or both, would reasonably be expected to constitute, an event of default
under the Indemnified Debt and (iv) such other documents or information as the
Removed Partner may reasonably request relating specifically and primarily to
the Indemnified Debt or the Removed Partner Debt Indemnity. The successor
General Partner shall prepare and file, or cause to be prepared and filed,
applicable tax returns consistent with the allocation of the Indemnified Debt to
the Removed Partner as contemplated herein.
(e) Amendment. Notwithstanding any other provision of this Agreement and
pursuant to the authority granted the Managing General Partner in Section
13.1(g) hereof, the Managing General Partner may, in its sole discretion, at any
time prior to the date that the MLP formally solicits a vote of the holders of
Units to remove the Managing General Partner as provided in Section 11.2 of the
MLP Agreement, amend this Agreement to modify or delete any or all of the
provisions of this Section 11.4 in such manner as the Managing General Partner
shall determine in its sole discretion is necessary or desirable to eliminate or
modify the indemnity set forth in Section 11.4(a), the covenants set forth in
Section 11.4(b) or to make other conforming changes. From and after the Removal
Date this Section 11.4 shall be amended only with the written consent of the
Removed Partner.
4. Section 1.1 of the Partnership Agreement is hereby amended by adding the
following new definitions:
"Allocable Indemnified Debt" means the amount of the Indemnified
Debt that is allocated to the Removed Partner for purposes of
Section 752 of the Code (taking into account the Removed Partner
Debt Indemnity).
"Converted GP Interest" has the meaning assigned to such term in
Section 11.3(a).
"Indemnified Debt" has the meaning assigned to such term in
Section 11.4(a).
"Outstanding Indemnified Debt Amount" means (i) during the fiscal
year in which the Removed Partner has been removed as Managing General
Partner, an amount of Indemnified Debt equal to the difference between
(A) the Allocable Indemnified Debt determined as of the effective time
of the Removal Date and (B) the federal income tax basis of the
Removed Partner in its Retained LP Interest determined as of the
beginning of the fiscal year in which the Removal Date occurs, and
(ii) during each fiscal year thereafter, an amount of Indemnified Debt
equal to the difference between (A) the Allocable Indemnified Debt
determined as of the first
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day of such fiscal year and (B) the federal income tax basis of the Removed
Partner in its Retained LP Interest determined as of the first day of such
fiscal year.
"Removal Date" has the meaning assigned to such term in
Section 11.4(a).
"Removed Partner" has the meaning assigned to such term in
Section 11.4(a).
"Removed Partner Debt Indemnity" has the meaning assigned to
such term in Section 11.4(a).
"Retained LP Interest" has the meaning assigned to such term
in Section 11.4(a).
5. Except as set forth above, all provisions of the
Partnership Agreement will remain in full force and effect.
6. This Amendment No. 2 shall be binding upon, and shall
enure to the benefit of, the parties hereto and their respective successors
and assigns.
7. This Amendment No. 2 shall be governed by, and
interpreted in accordance with, the laws of the State of Delaware, all rights
and remedies being governed by such laws, without regard to principles of
conflict of laws.
IN WITNESS WHEREOF, the undersigned have executed this
Amendment No. 2 to the Partnership Agreement as of the date first written above.
MANAGING GENERAL PARTNER
National Propane Corporation
By: /s/ Xxxxxx X. Xxxxxxxxxx
__________________________
Name: Xxxxxx X. Xxxxxxxxxx
Title: President and Chief
Operating Officer
SPECIAL GENERAL PARTNER
National Propane SGP, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxxx
___________________________
Name: Xxxxxx X. Xxxxxxxxxx
Title: President and Chief
Operating Officer
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Title:
LIMITED PARTNER
National Propane Partners, L.P.
BY: National Propane Corporation,
the Managing General Partner
By: /s/ Xxxxxx X. Xxxxxxxxxx
___________________________
Name: Xxxxxx X. Xxxxxxxxxx
Title: President and Chief
Operating Officer
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