AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
XXXX BLUFF HUB PARTNERS, L.P.
Dated as of December 15, 1994
PAGE
INDEX
PAGE
ARTICLE I. DEFINITIONS AND TERMS.................................... 1
1.01 Definitions.............................................. 1
1.02 Terms Generally.......................................... 3
ARTICLE II. FORMATION OF PARTNERSHIP................................. 3
2.01 Formation................................................ 3
2.02 Name..................................................... 4
2.03 Principal Office, Registered Office
and Agent for Service of Process......................... 4
2.04 Purpose.................................................. 4
2.05 Term..................................................... 4
2.06 Partners................................................. 4
ARTICLE III. CONTRIBUTIONS............................................ 5
3.01 Scheduled Contributions.................................. 5
3.02 Additional Contributions................................. 5
3.03 No Return................................................ 5
ARTICLE IV. DISTRIBUTIONS............................................ 5
4.01 Distributions............................................ 5
ARTICLE V. CONTROL OF THE PARTNERSHIP............................... 5
5.01 Power and Authority...................................... 5
5.02 Inquiries................................................ 6
5.03 Compensation............................................. 7
ARTICLE VI. TRANSFER OR SALE OF PARTNERSHIP INTERESTS................ 7
6.01 Partner Approvals........................................ 7
6.02 Substitution of Assignee................................. 7
6.03 Permitted Security Interests............................. 7
ARTICLE VII. BOOKS AND RECORDS AND ACCOUNTING......................... 8
7.01 Financial Information.................................... 8
7.02 Fiscal Year.............................................. 8
7.03 Access to Books and Records.............................. 8
ARTICLE VIII. RESPONSIBILITIES OF PARTNERS AND OFFICERS................ 8
8.01 Liability to Partners.................................... 8
8.02 Indemnification.......................................... 9
8.03 Time Devoted to Affairs; Other Ventures.................. 11
8.04 Good Faith Reliance on Agreement......................... 12
8.05 Certain Standards........................................ 12
ARTICLE IX. ADMISSION OF ADDITIONAL PARTNERS......................... 12
9.01 Admission Requirements................................... 12
ARTICLE X. ACTIONS OF THE PARTNERS.................................. 13
10.01 Written Consents......................................... 13
10.02 Authorization Requirements............................... 13
ARTICLE XI. WITHDRAWALS; LOANS....................................... 13
11.01 Withdrawals.............................................. 13
11.02 Loans from Partners...................................... 14
ARTICLE XII. DISSOLUTION AND TERMINATION.............................. 14
12.01 Dissolution.............................................. 14
12.02 Winding Up............................................... 14
12.03 Distributions............................................ 15
12.04 Waiver of Partition...................................... 15
ARTICLE XIII. MISCELLANEOUS............................................ 15
13.01 Notices.................................................. 15
13.02 Captions................................................. 15
13.03 Further Assurances....................................... 16
13.04 Successors and Assigns................................... 16
13.05 Governing Law............................................ 16
13.06 Integration.............................................. 16
13.07 Amendments............................................... 16
13.08 No Third-Party Rights.................................... 16
13.09 Relationship of the Partners............................. 16
13.10 Counterparts............................................. 17
13.11 Waiver................................................... 17
13.12 Appendices............................................... 17
APPENDIX A Tax Matters................................................A-1
APPENDIX B Facility...................................................B-1
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AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
XXXX BLUFF HUB PARTNERS, L.P.
This Amended and Restated Agreement of Limited Partnership dated as
of December 15, 1994 of Xxxx Bluff Hub Partners, L.P., a Delaware limited
partnership, is entered into by and between Xxxx Bluff Hub Partners, Inc., a
Delaware corporation ("MBHP GP") and Market Hub Partners, L.P., a Delaware
limited partnership ("MHP"),
WHEREAS, the Partnership was initially formed by Xxxx Bluff Gas
Storage Company, Inc., a Delaware corporation ("Storage") as limited partner and
MBHP GP as general partner; thereafter, Xxxx Bluff Gas Storage Company, Inc. was
merged with and into the Partnership and as a result thereof TPC Gas Storage
Services, Inc., a Delaware corporation ("TPC Inc.") succeeded Storage as limited
partner of the Partnership; thereafter TPC Inc. assigned its interests in the
Partnership to TPC Gas Storage Services, L.P., a Delaware limited partnership
("TPC LP"); and thereafter TPC LP assigned such interests in the Partnership to
MHP.
NOW, THEREFORE, the parties hereto do hereby amend and restate the
agreement of limited partnership of the Partnership to be as follows:
ARTICLE I.
DEFINITIONS AND TERMS
1.01 DEFINITIONS. Unless the context otherwise requires, the
following terms shall have the following meanings for purposes of this
Agreement:
ADDITIONAL CONTRIBUTION: As defined in Section 3.02.
AFFILIATE: With respect to any Partner (a) any director, officer,
employee or (if such Partner is a partnership) partner of such Partner; and (b)
any other person or entity which, directly or indirectly, controls, is
controlled by, or is under common control with such Partner.
As used herein, "control" shall mean the power to direct or cause the direction
of the management and policies of a Partner, whether through the ownership of
voting securities, by contract or otherwise.
AGREEMENT: This Agreement, as the same may be amended from time to
time in accordance with the provisions hereof.
BUSINESS DAY: Monday through Friday of each week, except that a
legal holiday recognized as such by the United States shall not be recognized as
a Business Day.
CERTIFICATE: As defined in Section 2.01.
CONTRIBUTIONS: As to any Partner, the agreed value of any property
and the amount of cash contributed by it under Article III.
DISTRIBUTABLE CASH: At any time, all cash of the Partnership at such
time in excess of the amount which the Managing General Partner determines is
required to meet the Partnership's anticipated obligations (including reserves
for projected expenditures, working capital and contingencies), and subject to
restrictions imposed by debt agreements.
DRULPA: As defined in Section 2.01.
FACILITY: The Xxxx Bluff market hub and high deliverability gas
storage facilities, or the right to own and develop such facilities, together
with real-time nomination, allocation and title tracking systems and gas trading
platforms, that are referenced on Appendix B hereto or that may be approved by
the Managing General Partner.
GENERAL PARTNER: The person admitted as a general partner to the
Partnership and who owns, at the time, the right to receive distributions from
the Partnership pursuant to this Agreement.
LIMITED PARTNER: The person admitted as the limited partner to the
Partnership.
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MANAGING GENERAL PARTNER: Xxxx Bluff Hub Partners, Inc., a Delaware
corporation, or its successors, if any.
OWNERSHIP PERCENTAGE: With respect to MBHP GP, 1.0102%, and with
respect to MHP, 98.9898%.
PARTNERS: The General Partner and the Limited Partner.
PARTNERSHIP: The limited partnership formed pursuant to this
Agreement.
PARTNERSHIP'S ACCOUNTANTS: Such firm of independent public
accountants as are selected, from time to time, by the Managing General Partner.
1.02 TERMS GENERALLY. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include," "includes" and "including" shall
be deemed to be followed by the phrase "without limitation."
ARTICLE II.
FORMATION OF PARTNERSHIP
2.01 FORMATION. The parties hereto hereby continue the Partnership
pursuant to the Delaware Revised Uniform Limited Partnership Act ("DRULPA"). The
Managing General Partner of the Partnership has caused to be filed the
certificate of limited partnership ("Certificate") required by the DRULPA and
shall cause to be filed such other certificates or filings as may be required
for the formation and operation of the Partnership in the State of Delaware or
any other state in which the Partnership elects to do business.
2.02 NAME. The name of the Partnership shall be "Xxxx Bluff Hub
Partners, L.P." The Partnership may change its name or adopt such trade or
fictitious names as it may
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determine. The Managing General Partner shall give the Partners prompt written
notice of any such changes.
2.03 PRINCIPAL OFFICE, REGISTERED OFFICE AND AGENT FOR SERVICE OF
PROCESS. The principal office of the Partnership shall be 00000 Xxxxxxxxx
Xxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000 or such other place as shall be
determined by the Managing General Partner. The Managing General Partner shall
give the Partners prompt written notice of any change in the principal place of
business of the Partnership. The name of the registered agent for service of
process on the Partnership in Delaware is The Corporation Trust Company. The
address of the registered agent and the address of the registered office of the
Partnership in Delaware is Corporation Trust Center, 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx 00000.
2.04 PURPOSE. The principal purpose of the Partnership shall be to
develop, construct, own and operate the Facility and to engage in such other
business and activities as shall be incidental to or related to the foregoing or
as may be determined by the Managing General Partner from time to time and
permitted by law. Such activities may be undertaken directly by the Partnership
or through its subsidiaries.
2.05 TERM. The Partnership shall continue in effect under the terms
of this Agreement from the date hereof until dissolved and liquidated in the
manner provided in Article XII.
2.06 PARTNERS.
(a) GENERAL PARTNER. The general partner of the Partnership is MBHP
GP.
(b) LIMITED PARTNER. MHP is the limited partner of the Partnership.
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ARTICLE III.
CONTRIBUTIONS
3.01 SCHEDULED CONTRIBUTIONS. Each Partner (or its predecessor in
interest) has made Contributions to the Partnership.
3.02 ADDITIONAL CONTRIBUTIONS. The Partners shall be obligated to
make such additional Contributions to the Partnership (an "Additional
Contribution") at such times as shall be proposed and approved from time to time
by the Managing General Partner. Any such Additional Contribution shall be made
by all Partners in proportion to their relative Ownership Percentages.
3.03 NO RETURN. Except as and to the extent otherwise expressly
provided in this Agreement, no Partner shall be entitled to a return of, or
interest on, its Contributions or on any undistributed funds held by the
Partnership.
ARTICLE IV.
DISTRIBUTIONS
4.01 DISTRIBUTIONS. From time to time, the Managing General Partner
may determine the amount of Distributable Cash, if any, which is to be
distributed by the Partnership, and any such amounts shall be divided among the
Partners in proportion to their Ownership Percentages.
ARTICLE V.
CONTROL OF THE PARTNERSHIP
5.01 POWER AND AUTHORITY. Except as otherwise expressly provided by
this Agreement or by nonwaivable provisions of applicable law, (i) the
management and control of the business and affairs of the Partnership shall be
vested in the Managing General Partner, which
may act on behalf of the Partnership without the consent of the individual
Partners, (ii) all
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decisions respecting any matter set forth herein or otherwise affecting or
arising out of the conduct of the business of the Partnership shall be made by
the Managing General Partner, (iii) the Managing General Partner shall have the
exclusive right and full authority to manage, conduct and control the
Partnership's business and to effect the purposes and provisions of this
Agreement and (iv) the Managing General Partner shall have full authority to do
all things in the conduct of the business of the Partnership deemed necessary or
desirable by the Managing General Partner.
5.02 INQUIRIES. In no event shall any person, other than a Partner,
dealing with the Managing General Partner with respect to any business or
property of the Partnership be obligated to ascertain that the provisions of
this Agreement have been complied with or be obligated to inquire into the
necessity or expedience of any act or action of the Managing General Partner;
and every contract, agreement, deed, mortgage, security agreement, promissory
note or other instrument or document executed by the Managing General Partner
with respect to any business or property of the Partnership shall be conclusive
evidence in favor of any person relying on or claiming thereunder (in the
absence of such person's actual knowledge to the contrary) that (i) at the time
of the execution and delivery thereof, this Agreement was in full force and
effect, (ii) such instrument or document was duly executed in accordance with
the terms and provisions of this Agreement and is binding upon the Partnership,
and (iii) the Managing General Partner was duly authorized and empowered to
execute and deliver any instrument or document for and on behalf of the
Partnership. Any act of the Managing General Partner that purports to be on
behalf of the Partnership shall be binding on the Partnership as against all
third parties who act in reliance thereon and who do not have actual knowledge
of such Managing General Partner's lack or abuse of authority.
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5.03 COMPENSATION. The Managing General Partner is not entitled to
compensation for its services as Managing General Partner, but is entitled to be
reimbursed on a monthly basis for its reasonable operating, administrative and
office expenses related to the conduct of the Partnership's business including,
without limitation (i) costs of personnel employed by, or on loan to, the
Managing General Partner to conduct the Partnership's business, (ii)
expenditures for office space and (iii) costs attributable to using existing
office equipment or purchasing new office equipment authorized in an approved
Budget, expenditures for office supplies, expenses for communications, and other
reasonable out-of-pocket costs.
ARTICLE VI.
TRANSFER OR SALE OF PARTNERSHIP INTERESTS
6.01 PARTNER APPROVALS. Each Partner agrees not to sell, assign, or
otherwise transfer (collectively, a "Transfer") all or any part of its interest
in the Partnership. Any purported Transfer (including a purported Transfer upon
the foreclosure of or other realization upon a security interest) which is made
by a Partner is void and shall be of no effect whatsoever.
6.02 SUBSTITUTION OF ASSIGNEE.
No person who has acquired all or a part of an interest in the
Partnership who is not already a limited partner of the Partnership shall be
admitted as a substituted limited partner of the Partnership with respect to
such interest in the Partnership without the prior written approval of each
Partner which approval may be given or not in the sole discretion of each such
Partner.
6.03 PERMITTED SECURITY INTERESTS. The requirements of this Article
VI shall not apply to a collateral assignment, pledge or other transfer creating
a security interest in all or any portion of a Partner's interest in the
Partnership under any mortgage, indenture or deed of
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trust created by such Partner not otherwise prohibited by the terms of any
credit agreement or other instrument evidencing debt to which the Partnership is
then subject.
ARTICLE VII.
BOOKS AND RECORDS AND ACCOUNTING
7.01 FINANCIAL INFORMATION. The Partnership shall maintain adequate
books and records of account which shall be kept in accordance with the method
of accounting determined by the Managing General Partner, and shall reflect all
Partnership transactions and be appropriate and adequate for the Partnership's
business. During the term of the Partnership, the Partnership shall furnish to
the Managing General Partner such reports as the Managing General Partner shall
determine.
7.02 FISCAL YEAR. The fiscal year for the Partnership shall be the
calendar year or such other fiscal year as may be determined by the Managing
General Partner.
7.03 ACCESS TO BOOKS AND RECORDS. The Managing General Partner shall
permit, after reasonable notice, access to all books, records and facilities of
the Partnership at any reasonable time to any Partner or its representative.
ARTICLE VIII.
RESPONSIBILITIES OF PARTNERS AND OFFICERS
8.01 LIABILITY TO PARTNERS. No Partner of the Partnership or
director, officer, partner, or employee of a Partner shall be liable to the
Partnership or to any Partner for any losses sustained or liabilities incurred
as a result of any act or omission if (i) such person acted in good faith and in
a manner it reasonably believed to be in, or not opposed to, the best interests
of the Partnership, and (ii) its conduct did not constitute gross negligence or
willful or wanton misconduct.
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8.02 INDEMNIFICATION.
(a) To the fullest extent permitted by law, each Partner and each
director, officer, partner and employee of each Partner (individually, an
"Indemnitee") shall be indemnified and held harmless by the Partnership
from and against any and all losses, claims, damages, liabilities, joint
and several, expenses (including legal fees and expenses), judgments,
fines, settlements and other amounts arising from any and all claims,
demands, actions, suits or proceedings, civil, criminal, administrative or
investigative (other than an action by or in the right of the
Partnership), in which the Indemnitee may be involved, or threatened to be
involved, as a party or otherwise by reason of its status as a Partner or
a director, officer, partner or employee of a Partner, regardless of
whether the Indemnitee continues to be a Partner of the Partnership or
director, officer, partner or employee of a Partner at the time any such
liability or expense is paid or incurred, if (i) the Indemnitee acted in
good faith and in a manner it reasonably believed to be in, or not opposed
to, the best interests of the Partnership, and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful, and (ii) the Indemnitee's conduct did not constitute gross
negligence or willful or wanton misconduct. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere, or its equivalent, shall not, of itself, create a
presumption that the Indemnitee acted in a manner contrary to that
specified in (i) or (ii) above.
(b) To the fullest extent permitted by law, each Indemnitee shall be
indemnified and held harmless by the Partnership against any and all
expenses (including legal fees and expenses) arising from any and all
claims, demands, actions, suits or proceedings, civil, criminal,
administrative or investigative, brought by or in the right of
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the Partnership, in which the Indemnitee may be involved, or threatened to
be involved, as a party or otherwise by reason of its status as a Partner
or director, officer, partner or employee of a Partner, regardless of
whether the Indemnitee continues to be a Partner or director, officer,
partner or employee of a Partner at the time any such expense is paid or
incurred, if the Indemnitee acted in good faith and in a manner it
reasonably believed to be in, or not opposed to, the best interests of the
Partnership, and, with respect to any criminal proceeding, had no
reasonable cause to believe its conduct was unlawful, except that no
indemnification may be made with respect to any claim, demand, action,
suit or proceeding as to which such person shall have been adjudged to be
liable for gross negligence or willful or wanton misconduct unless and
only to the extent that the court in which such claim, demand, action,
suit or proceeding was brought shall determine upon application that,
despite the adjudication of liability but in view of all of the
circumstances of the case, such person is fairly and reasonably entitled
to indemnity for such expenses that such court shall deem proper.
(c) To the fullest extent permitted by law, expenses incurred by an
Indemnitee in defending any claim, demand, action, suit or proceeding
subject to this Section 8.02 shall, from time to time, be advanced by the
Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the Partnership of any undertaking by
or on behalf of the Indemnitee to repay such amount unless it shall be
determined that such person is entitled to be indemnified as authorized in
this Section 8.02.
(d) The indemnification provided by this Section 8.02 shall be in
addition to any other rights to which those indemnified may be entitled
under any agreement, vote of the Partners, as a matter of law or
otherwise, both as to action in the Indemnitee's
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capacity as a Partner or director, officer, partner or employee of a
Partner and to action in another capacity, 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.
(e) In no event may an Indemnitee subject any General Partner or
Limited Partner of the Partnership to personal liability by reason of
these indemnification provisions.
(f) An Indemnitee shall not be denied indemnification, in whole or
in part, under this Section 8.02 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.
(g) Any indemnification under this Section 8.02, unless ordered by a
court, shall be made by the Partnership only as authorized in the specific
case and only upon a determination that indemnification of the Indemnitee
is proper in the circumstances because the Indemnitee has met the
applicable standard of conduct set forth in the pertinent subsection, such
determination to be made (i) by the General Partner, if the General
Partner is not a named defendant or respondent in the proceeding, (ii) by
a majority of the Limited Partners or (iii) in a written opinion of
independent legal counsel.
8.03 TIME DEVOTED TO AFFAIRS; OTHER VENTURES. No Partner shall be
required to devote its full time and effort to Partnership affairs, but only
such time and effort as each in such person's judgment deems to be reasonably
necessary and appropriate in pursuit of the affairs of the Partnership. Except
as otherwise prohibited by contract, any Partner may engage in any other
business venture of every nature, independently or with others, and no other
Partner shall
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have any rights by virtue of this Agreement in and to such ventures or to the
revenues or profits derived therefrom.
8.04 GOOD FAITH RELIANCE ON AGREEMENT. To the extent that, at law or
in equity, the Partners have duties (including fiduciary duties) and liabilities
relating thereto to the Partnership or to another Partner, the Partners acting
under this Agreement shall not be liable to the Partnership or to any such other
Partner for their good faith reliance on the provisions of this Agreement. The
provisions of this Agreement, to the extent that they expand or restrict the
duties and liabilities of the Partners otherwise existing at law or in equity,
are agreed by the Partners to replace such other duties and liabilities of the
Partners.
8.05 CERTAIN STANDARDS. Whenever in this Agreement any Partner is
permitted or required to make a decision (i) in its "sole discretion" or
"discretion," or under a similar grant of authority or latitude, such Partner
shall be entitled to consider only such interests and factors as it desires and
may consider its own interests, and shall have no duty or obligation to give any
consideration to any interest of or factors affecting the Partnership or the
other Partners, or (ii) in "good faith" or under another express standard, such
Partner shall be entitled to act under such express standard and shall not be
subject to any other or different standards imposed by this Agreement or by law
or any other agreement contemplated herein.
ARTICLE IX.
ADMISSION OF ADDITIONAL PARTNERS
9.01 ADMISSION REQUIREMENTS. Admission of new Limited Partners and
the terms and conditions thereof (including the terms of any interests in or
securities of the Partnership sold thereto) must be approved by the Managing
General Partner. Any such admission is effective only after the new Limited
Partner has executed and delivered to the
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Partnership a document including the new Partner's notice address and its
agreement to be bound to this Agreement.
ARTICLE X.
ACTIONS OF THE PARTNERS
10.01 WRITTEN CONSENTS. Actions of the Partners shall be taken by
means of a consent in writing setting forth the action so taken and signed by
Partners representing not less than the minimum Ownership Percentage that is
necessary to authorize such action pursuant to this Agreement. All such consents
shall be filed with the Partnership records. To the extent that the written
consent represents a consent by less than all Partners, those Partners not
consenting to such action or actions shall receive notice of the actions taken
by written consent within 10 days of the written consent.
10.02 AUTHORIZATION REQUIREMENTS. Except as otherwise provided in
this Agreement, the act of Partners representing a majority by Ownership
Percentages shall be the act of the Partners and all references to actions by a
majority of the Partners shall be deemed to refer to a majority by Ownership
Percentage.
ARTICLE XI.
WITHDRAWALS; LOANS
11.01 WITHDRAWALS. Each Partner hereby agrees that it will not
withdraw from the Partnership during the term of this Agreement; provided,
however, that such covenant is not specifically enforceable. Each Partner agrees
that if it does withdraw in violation of this provision, it will be liable to
the Partnership for any damages caused by such withdrawal. Except as otherwise
provided herein, no Partner shall have the right to withdraw any part of its
Contribution to the Partnership or to receive any distribution of, or interest
on, such Contribution.
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11.02 LOANS FROM PARTNERS. The Partnership may borrow money from any
Partner or an Affiliate thereof but only on terms and conditions approved by the
Managing General Partner. Loans by a Partner to the Partnership shall not be
considered Contributions to the Partnership.
ARTICLE XII.
DISSOLUTION AND TERMINATION
12.01 DISSOLUTION. The Partnership shall be dissolved upon the first
to occur of any of the following events:
(a) The written determination (making reference to this Section
12.01) of a majority of the Partners;
(b) The withdrawal, within the meaning of the DRULPA, of the
Managing General Partner;
(c) December 31, 2024; or
(d) As otherwise provided by law.
Any dissolution of the Partnership shall be effective on the date
the event occurs giving rise to the dissolution, but the Partnership shall not
terminate until its affairs have been wound up and its assets distributed as
provided in this Article XII. The Partnership shall not be dissolved and wound
up by virtue of the withdrawal of a General Partner if the remaining Partners
elect within 30 days after such withdrawal to continue the Partnership. If such
election to continue is made, such remaining Partners shall continue the
business of the Partnership and take any and all such action as may be necessary
or appropriate to reconstitute the Partnership including the election of a new
Managing General Partner.
12.02 WINDING UP. Upon dissolution of the Partnership, the Managing
General Partner shall wind up the affairs of the Partnership in accordance with
applicable law, and
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incident thereto, unless satisfactory arrangements are otherwise made, shall
sell sufficient Partnership assets to pay all Partnership liabilities and shall
sell or otherwise dispose of all other Partnership assets; provided, however,
that prior to selling the Partnership's assets, the Managing General Partner
shall offer such assets for sale to the Partners pursuant to bidding procedures
designed to insure that such assets are sold for their fair market value.
12.03 DISTRIBUTIONS. As soon as the actions contemplated by Section
12.02 have been completed, the cash proceeds, if any, from the sale of the
Partnership's assets shall be distributed by the Managing General Partner in
accordance with Article IV hereof.
12.04 WAIVER OF PARTITION. Each Partner hereby waives until
termination of the Partnership any and all rights that such Partner may have to
maintain an action for partition of the Partnership's assets.
ARTICLE XIII.
MISCELLANEOUS
13.01 NOTICES. All notices, offers or other communications required
or permitted to be given pursuant to this Agreement shall be in writing and
shall be considered as properly given or made if mailed from within the United
States by first class United States mail, postage prepaid, or by prepaid
telegram or telex, and addressed, as the case may be, to the Partnership at
00000 Xxxxxxxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, or to a Partner at its
address as set forth on the signature page of this Agreement. The Partnership
may change its address by giving a notice thereof stating its new address to the
Partners. Any Partner may change its address by giving a notice thereof stating
its new address to the Partnership.
13.02 CAPTIONS. Captions contained in this Agreement are inserted
only as a matter of convenience and in no way define, limit, extend or describe
the scope of this Agreement or the intent of any provision hereof.
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13.03 FURTHER ASSURANCES. The Partners will execute and deliver such
further instruments and take or refrain from taking any action as may be
necessary or appropriate to carry out the intent and purpose of this Agreement.
13.04 SUCCESSORS AND ASSIGNS. Except as otherwise provided in this
Agreement, all provisions of this Agreement shall be binding upon, inure to the
benefit of, and be enforceable by and against the respective heirs, executors,
administrators, legal representatives, successors and assigns of each of the
Partners.
13.05 GOVERNING LAW. NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT
MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT
ALL OF THE TERMS AND PROVISIONS HEREOF SHALL BE CONSTRUED UNDER THE SUBSTANTIVE
LAWS OF THE STATE OF DELAWARE AS NOW ADOPTED OR AS MAY HEREAFTER BE AMENDED.
13.06 INTEGRATION. This Agreement constitutes the entire agreement
among the parties pertaining to the subject matter hereof and supersedes all
prior and contemporaneous agreements and understandings of the parties in
connection therewith.
13.07 AMENDMENTS. This Agreement, including the Appendices hereto,
may not be modified or amended unless a consent in writing setting forth the
amendment or modification shall be signed by a majority of the Partners.
13.08 NO THIRD-PARTY RIGHTS. Nothing in this Agreement shall be
deemed to create any right in any person not a party hereto (other than the
successors and assigns of a party hereto) and this instrument shall not be
construed in any respect to be a contract in whole or in part for the benefit of
any third party.
13.09 RELATIONSHIP OF THE PARTNERS. The relationship between each
of the Partners shall be limited to the performance of the transactions
contemplated by this Agreement.
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The relationship set forth in this Agreement shall be construed and deemed to be
a partnership created for the sole purpose of carrying out the transactions
contemplated hereby.
13.10 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be an original of this Agreement, but all of
which, taken together, shall constitute one and the same Agreement.
13.11 WAIVER. No provision hereof may be waived, except with the
majority vote of the Partners. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute a waiver of any such breach or any other covenant, duty, agreement or
condition.
13.12 APPENDICES. Appendices A and B hereto are incorporated by
reference herein and made a part of this Agreement, to the same extent as if
fully set forth herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first written above.
GENERAL PARTNER:
XXXX BLUFF HUB PARTNERS, INC.
By:/s/ XXXXXX X. XXXXXXX
Name: Xxxxxx X. Xxxxxxx
Title: President
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LIMITED PARTNER:
MARKET HUB PARTNERS, L.P.
By: MARKET HUB PARTNERS, INC.,
a general partner
By:/s/ XXXXXX X. XXXXXXX
Name: Xxxxxx X. Xxxxxxx
Title: President
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APPENDIX A
TAX MATTERS
1.01 TAX ITEMS.
A. ALLOCATIONS OF TAX ITEMS.
Each item of income and deduction recognized by the Partnership for
federal, state or local income tax purposes shall be allocated among the
Partners in the same manner that the corresponding item of tax book income or
tax book deduction is allocated pursuant to the provisions of this Appendix A;
provided, however, that
(i) if there are differences between the amount of an item for
income tax purposes and the amount of the corresponding item for tax book
purposes, then such item shall be allocated for income tax purposes taking
into account the allocation of such corresponding tax book item and the
provisions of Section 704(c) of the Internal Revenue Code applied in the
manner determined by the Managing General Partner, but
(ii) the traditional method of Treas. Reg. ss. 1.704-3(b) shall be
used in applying Section 704(c) with respect to the assets contributed to
the Partnership upon the formation thereof.
Items of income, gain, loss, deduction or credit which are not allocated for
income tax purposes pursuant to the foregoing shall be allocated in the manner
determined by the Managing General Partner.
The provisions of this Appendix A with respect to the allocation of
the Partnership's items of income, gain, loss, deduction or credit for income
tax purposes may be
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amended by the Managing General Partner after any issuance by the Partnership of
an interest in the Partnership to reflect the effect of such new interest in the
Partnership taking into account applicable law and may also be amended by the
Managing General Partner if, in either case, the Managing General Partner has
received an opinion from Xxxxx & Xxxxx, L.L.P. or other independent tax counsel
of nationally recognized standing that such amendment is appropriate to reflect
the requirements of existing law; provided, however, that clause (ii) of the
preceding paragraph may not be amended without the consent of each partner of
MHP who would be adversely affected thereby.
B. TAX ELECTIONS.
The Managing General Partner shall determine whether the Partnership
shall make any election (including any election which may be permitted with
respect to the Partnership's method of accounting and any election for which
provision is made in Section 168 and Section 754 of the Internal Revenue Code or
corresponding provisions of future law) which is available to the Partnership
for federal, state or local tax purposes. Notwithstanding the foregoing, upon
the transfer of an interest in MHP, the Partnership shall, if requested by MHP,
elect to adjust the basis of the Partnership property as allowed by Sections
743(b) and 754 of the Internal Revenue Code, or comparable provisions then in
effect, and if any such election is made, the Partnership shall make any tax
accounting adjustments resulting from such election in the information supplied
to the Partners, and the Partnership shall have the right to charge MHP for the
Partnership's reasonable expenses in making such adjustments.
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C. PREPARATION OF TAX RETURNS.
The Managing General Partner shall use its reasonable efforts to
cause the Partnership to prepare and timely file, at the expense of the
Partnership, all tax returns of the Partnership and shall furnish to the
Partners the tax information reasonably required thereby for federal, state and
local tax reporting purposes.
D. TAX MATTERS PARTNER.
The Managing General Partner is hereby designated as the tax matters
partner, within the meaning of Section 6231(a)(7) of the Internal Revenue Code,
and is authorized to represent the Partnership at the Partnership's expense
(including the costs of professional services) in connection with any
examination of the Partnership's affairs by any tax authority and is authorized
so to represent the Partnership at the Partnership's expense in any
administrative or judicial proceedings in connection therewith.
Prompt notice shall be given to the Partners upon receipt of advice
that the Internal Revenue Service or other taxing authority intends to examine
any income tax return or records or books of the Partnership. Any Partner may
participate at such Partner's expense in any such administrative or judicial
proceeding to the extent provided by applicable law.
E. ASSIGNOR-ASSIGNEE ALLOCATIONS.
The Partnership shall allocate items of income, gain, loss,
deduction and credit attributable to an interest in the Partnership that is
assigned between the assignor and assignee in accordance with the method the
Managing General Partner determines is required by the Internal Revenue Code,
and if the Managing General Partner determines that more than one
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method is permitted, then such items shall be allocated in accordance with the
method that the Managing General Partner selects.
1.02 ALLOCATION OF TAX BOOK ITEMS.
A. RECOURSE ITEMS.
The items of tax book income and tax book deduction which are not
allocated pursuant to Section 1.02B hereof shall be allocated among the Partners
in proportion to their Ownership Percentages.
B. NONRECOURSE DEDUCTIONS; PARTNER NONRECOURSE DEDUCTIONS.
1. Nonrecourse Deductions.
A book nonrecourse deduction, within the meaning of the Section
704(b) Regulations (which is referred to herein as a "tax book nonrecourse
deduction"), recognized by the Partnership shall be allocated among the Partners
in proportion to their Ownership Percentages. Thereafter, each Partner is to be
allocated items of tax book income at the time or times and of the character and
in the amount required by the Section 704(b) Regulations in order to chargeback
such tax book nonrecourse deduction.
2. Partner Nonrecourse Deductions.
A book partner nonrecourse deduction, within the meaning of the
Section 704(b) Regulations (which is referred to herein as a "tax book partner
nonrecourse deduction"), which is recognized by the Partnership shall be
allocated to the Partner who bears the economic risk of loss of the tax book
partner nonrecourse debt with which such partner nonrecourse deduction is
associated. If more than one Partner bears the economic risk of loss for a
partner nonrecourse
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liability, then such tax book partner nonrecourse deductions shall be allocated
among the Partners according to the ratios in which they bear the economic risk
of loss with respect to the indebtedness with which the partner nonrecourse
deduction is associated. Thereafter, each Partner shall be allocated items of
tax book income at the time or times and of the character and in the amount
required by the Section 704(b) Regulations in order to chargeback such tax book
partner nonrecourse deduction.
C. CERTAIN DEFINITIONS.
1. Tax Book Income and Tax Book Deduction.
The items of tax book income and tax book deduction of the
Partnership for a taxable year are its items of income and deduction,
respectively, which are computed in accordance with the method of accounting
used by the Partnership for federal income tax purposes but using the tax book
basis computed in accordance with the method of accounting used by the
Partnership for federal income tax purposes but with regard to tax book income
and tax book deduction as the tax basis of each item of property. Such tax book
income and tax book deduction shall be adjusted as follows:
(a) Any receipt of the Partnership which is not the proceeds
of a debt incurred by the Partnership that is permanently excluded from
gross income for federal income tax purposes or is exempt from federal
income tax, within the meaning of Section 705(a)(1)(B) of the Internal
Revenue Code, is included without duplication as an item of tax book
income.
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(b) Any cost of the Partnership which is not a payment of
principal on a debt of the Partnership that for federal income tax
purposes is neither deductible currently, capitalized, nor taken into
account through some type of amortization or in computing gain or loss
upon the disposition of property and any expenditure of the Partnership
described in Section 705(a)(2)(B) of the Internal Revenue Code (or which
is treated as an expenditure described in Section 705(a)(2)(B) of the
Internal Revenue Code pursuant to the Section 704(b) Regulations) is an
item of tax book deduction, as is any other reduction in tax book basis of
an asset of the Partnership. Such item of tax book deduction is recognized
when the cost is incurred or the tax basis is reduced.
2. Tax Book Basis.
(a) Initial tax book basis.
The initial tax book basis of an asset of the Partnership shall be
determined pursuant to the applicable provisions of the Internal Revenue Code as
its cost; provided that (i) the initial tax book basis of an asset that is
contributed to the Partnership shall be equal to the Fair Market Value thereof
immediately after its contribution to the Partnership; and (ii) the initial tax
book basis of an asset the tax basis of which is determined, in whole or in
part, with reference to the tax basis of another asset of the Partnership shall
be so determined with reference to the adjusted tax book basis of such asset.
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(b) Certain adjustments to tax book basis.
The tax book basis of an asset shall be decreased in respect of tax
book depreciation or tax book amortization as provided below and shall be
increased or decreased in the case of an interest in a Facility Subsidiary or
other partnership as of the end of each taxable year of a Facility Subsidiary or
other partnership in the amount of the Partnership's distributive share of the
tax book income or tax book deductions of that Facility Subsidiary or other
partnership.
(c) Tax book depreciation.
The tax book basis of an asset shall be reduced to reflect tax book
depreciation or tax book amortization with respect to such asset for each
taxable year or portion thereof. In each case, tax book depreciation or tax book
amortization for a taxable year of the Partnership, or portion thereof, shall be
a fraction (which fraction is equal to the federal income tax depreciation or
amortization of such asset for such taxable year, or portion thereof, divided by
the adjusted tax basis of such asset at the beginning of the taxable year) of
the adjusted tax book basis of such asset at the beginning of the taxable year;
PROVIDED, HOWEVER, if the federal income tax depreciation or amortization with
respect to an asset for a taxable year is zero, tax book depreciation or tax
book amortization for the taxable year shall be determined with reference to the
adjusted tax book basis of such asset using any reasonable method selected by
the General Partner.
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3. Fair Market Value.
The Fair Market Value of an asset is the fair market value thereof
as determined by the Managing General Partner; provided that in the case of the
assets which were contributed by Xxxx Bluff Gas Storage Company, Inc. in the
Merger, the fair market value thereof (reduced by the amount of the assumed
liabilities) is $13,970,000.
4. Section 704(b) Regulations.
The term "Section 704(b) Regulations" means the regulations which
are issued from time to time pursuant to the authority of Section 704(b) of the
Internal Revenue Code.
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APPENDIX B
FACILITY
The Xxxx Bluff facility is a natural gas underground storage
facility located in Liberty and Xxxxxxxx Counties, Texas. Upon full build-out it
is currently anticipated to have a working gas capacity of approximately 10 BCF,
and 1.5 BCF/Day of withdrawal capacity. The facility currently has five pipeline
interconnects and is located on approximately 40 acres of land. The first two
caverns are in operation, and the third cavern is under construction.
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