EXHIBIT 1
FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
NOCO HOLDINGS, L.P.
A DELAWARE LIMITED PARTNERSHIP
This First Amended and Restated Agreement of Limited Partnership
(hereinafter referred to as the "AGREEMENT") of NOCO HOLDINGS, L.P. (the
"PARTNERSHIP"), is entered into effective September 17, 1994 by and among NOCO
Management, Ltd., a Texas limited liability company (the "GENERAL PARTNER"), the
persons listed on Exhibit "A" (the "CURRENT LIMITED PARTNERS"), and the persons
listed on Exhibit "B" (the "PREFERRED LIMITED PARTNERS").
WITNESSETH:
WHEREAS, the Partnership was formed on April 14, 1992, pursuant to the
Original Agreement (as hereinafter defined);
WHEREAS, the Partnership owns all of the stock of Norwegian Consortium
Inc., a Delaware, U.S.A., corporation ("NOCO CONSORTIUM"), and NOCO Properties,
Inc., a Delaware, U.S.A., corporation ("NOCO PROPERTIES");
WHEREAS, the Partnership is the sole limited partner and NOCO Properties
is the sole general partner of NOCO Enterprises, L.P., a Delaware, U.S.A.,
limited partnership ("NOCO ENTERPRISES");
WHEREAS, NOCO Enterprises has previously entered into a joint venture
with Xxxxxx Petroleum Company, a Delaware, U.S.A., corporation ("CALLON"), named
"CN Resources" ("CN RESOURCES");
WHEREAS, on September 16, 1994, NOCO Enterprises, Callon, and certain
other parties consummated a transaction (the "CONSOLIDATION") pursuant to which
(i) NOCO Enterprises contributed its joint venture interest in CN Resources to
the capital of a newly formed Delaware corporation ("NEW XXXXXX") in exchange
for shares of the Common Stock of New Xxxxxx, (ii) Xxxxxx Consolidated Partners,
L.P., a Delaware limited partnership which is an affiliate of Xxxxxx ("CCP"),
was merged into New Xxxxxx, with certain of the partners of CCP receiving shares
of the stock of New Xxxxxx, and (iii) the shareholders of Xxxxxx contributed all
of the stock owned by them in Xxxxxx in exchange for shares of the stock of New
Xxxxxx;
WHEREAS, NOCO Enterprises owes the Preferred Limited Partners the
indebtedness listed on Exhibit "C" (the "DEBT"); and
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WHEREAS, it has been proposed that (i) the Partnership assume from NOCO
Enterprises the Debt, (ii) a portion of the Debt be converted into preferred
limited partnership interests in the Partnership, and (iii) the Original
Agreement be amended and restated pursuant to this Agreement.
NOW, THEREFORE, for and in consideration and the mutual premises and
covenants contained herein, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I.
THE PARTNERSHIP
SECTION 1.A.1 CONFIRMATION OF FORMATION. As of the Effective Date, the
General Partner, the Current Limited Partners, and the Preferred Limited
Partners join and confirm the formation of a limited partnership (the
"PARTNERSHIP") pursuant to the provisions of the Delaware Revised Uniform
Limited Partnership Act (the "PARTNERSHIP ACT"). The rights and liabilities of
the Partners shall be as provided in the Partnership Act, except as herein
otherwise expressly provided. For purposes of the Partnership Act and subject to
the remainder of this Agreement, the General Partner shall be the general
partner of the Partnership and the Limited Partners (as hereinafter defined)
shall be the limited partners of the Partnership.
SECTION 1.A.2 THE ORIGINAL AGREEMENT. Except as provided in this Section
1.2, this Agreement supersedes any previous agreements among the parties
concerning the subject matter hereof, whether oral or written. The Original
Agreement is hereby superseded and terminated with respect to all events
occurring or actions taken on or subsequent to the Effective Date. The Original
Agreement shall continue to have validity with respect to the interpretation and
enforcement of the rights of the parties with respect to events occurring and/or
actions taken prior to the Effective Date.
ARTICLE II.
NAME AND REGISTERED AGENT
SECTION 2.A.1 NAME. The name of the Partnership is "NOCO HOLDINGS, L.P."
The business of the Partnership shall be conducted under such name and/or such
other names as the General Partner deems advisable and shall hereafter designate
in writing to the Partners.
SECTION 2.A.2 REGISTERED AGENT. Corporation Service Company shall
continue as the Registered Agent of the Partnership in the State of Delaware and
the address of the Registered Office of the Partnership in the State of Delaware
shall continue as 0000 Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx. The Partnership shall
establish registered offices in such other states as the General Partner shall
determine to be appropriate or necessary.
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ARTICLE III.
DEFINITIONS AND CONSTRUCTION
SECTION 3.A.1 DEFINITIONS. For purposes of this Agreement, the following
terms shall have the meanings indicated below:
"ADJUSTED CAPITAL ACCOUNT DEFICIT" means a deficit balance in the
capital account of a Limited Partner or Assignee as of the end of a specific
year, after crediting to such capital account any amounts which such Limited
Partner or Assignee is obligated to restore pursuant to any provision of this
Agreement or is deemed to be obligated to restore pursuant to applicable
Treasury Regulations. The Partners acknowledge that the Agreement does not
currently require any Limited Partner to restore any negative capital account
balance.
"ADJUSTED INITIAL CAPITAL ACCOUNT BALANCE" means as of the date to which
a reference is made, with respect to each Preferred Limited Partner, the capital
account balance of that Preferred Limited Partner as of the Effective Date, less
the aggregate amount of distributions previously made to that Preferred Limited
Partner by the Partnership to the extent and only to the extent such
distributions exceed in the aggregate the sum of: (i) the Net Income, if any,
previously allocated to that Preferred Limited Partner, plus (ii) any
contributions made by that Preferred Limited Partner to the Partnership
subsequent to the Effective Date.
"AGREEMENT" means this First Amended and Restated Agreement of Limited
Partnership, as amended, modified and/or supplemented from time to time.
"ANNIVERSARY DATE" means April 14, 1997.
"ASSIGNEE" means any person who has received an assignment of a
Partnership Interest but who has not been admitted as a substitute Limited or
General Partner pursuant to Sections 14.1 or 14.3.
"XXXXXX SHARES" means the 1,984,758 shares of the common stock of New
Xxxxxx which were issued to NOCO Enterprises pursuant to the Consolidation, and
any securities of New Xxxxxx subsequently acquired by NOCO Enterprises, or the
Partnership as a result of a stock dividend, stock split, or other distribution
from New Xxxxxx.
"CN RESOURCES" shall have the meaning indicated for that term in the
fourth recital of this Agreement.
"CODE" means the United States Internal Revenue Code of 1986, as
amended, or any successor statute.
"CONSOLIDATION" shall have the meaning indicated for that term in the
fifth recital of this Agreement.
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"CURRENT LIMITED PARTNERS" means the persons listed on Exhibit "A".
"DEBT" shall have the meaning indicated for that term in the sixth
recital of this Agreement.
"EFFECTIVE DATE" means September 17, 1994.
"LIMITED PARTNER" and "LIMITED PARTNERS" means (i) the Current Limited
Partners, (ii) the Preferred Limited Partners, and (iii) any other person who is
admitted to the Partnership as (a) a substitute Limited Partner pursuant to
Section 14.1 or (b) a new limited partner of the Partnership pursuant to Section
14.3.
"MAJORITY IN INTEREST OF THE CURRENT LIMITED PARTNERS" means a majority
in interest of the Current Limited Partners, determined on the basis of their
then relative Sharing Ratios.
"MAJORITY IN INTEREST OF THE LIMITED PARTNERS" means a majority in
interest of the Limited Partners, determined on the basis of their then relative
Sharing Ratios.
"MAJORITY IN INTEREST OF THE PREFERRED LIMITED PARTNERS" means a
majority in interest of the Preferred Limited Partners, determined on the basis
of their then relative Sharing Ratios.
"MARKET PRICE" means the average closing prices of the common stock of
New Xxxxxx over the principal securities exchange on which the common stock of
New Xxxxxx is traded for, unless a different period is clearly required by the
context, the twenty trading days preceding the date to which the reference is
made or, if not traded on an exchange, the average closing price for the twenty
trading days preceding such date as reported on the NASDAQ NMS, or if not traded
on an exchange or the NASDAQ NMS, the average of the closing bid and asked
prices of the common stock in the over the counter market during such twenty day
period as furnished by the National Quotation Bureau, Inc., or, if such firm at
that time is not engaged in the business of reporting such prices, as furnished
by any similar firm then engaged in such business and selected by the General
Partner, or, if there is no such firm, as furnished by any member of the
National Association of Securities Dealers, Inc., selected by the General
Partner.
"NET INCOME" and "NET LOSS" means, for each fiscal year or other fiscal
period of the Partnership, an amount equal to the taxable income or loss for the
Partnership for such year or period, determined in accordance with Code Section
703(a) (for this purpose, all items of income, gain, loss, or deduction required
to be stated separately pursuant to Code Section 703(a)(1) shall be included in
taxable income or loss), with the following adjustments:
i) any income of the Partnership that is exempt from federal income
tax and not otherwise taken into account in computing Net Income
or Net Loss shall be added to such taxable income or loss;
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ii) any expenditures of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B)
expenditures pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(i), and not otherwise taken into account in
computing Net Income or Net Loss, shall be subtracted from such
taxable income or loss;
iii) upon the adjustment of the value of any asset of the Partnership
pursuant to Section 7.4(iii), the amount of such adjustment
shall be taken into account as gain or loss from the disposition
of such asset for purposes of computing taxable income or loss,
and such adjusted amount shall thereafter be used for the
purpose of computing cost recovery deductions with respect to
such asset; and
iv) gain or loss resulting from any disposition of the property or
assets of the Partnership with respect to which gain or loss is
recognized for federal income tax purposes shall be computed by
reference to the value of such asset or property on the books of
the Partnership, as recomputed from time to time pursuant to
Section 7.4(iii), notwithstanding that the adjusted tax basis of
such property differs from such value.
"NEW XXXXXX" shall have the meaning indicated for that term in the fifth
recital of this Agreement.
"NOCO CONSORTIUM" shall have the meaning indicated for that term in the
second recital of this Agreement.
"NOCO ENTERPRISES" shall have the meaning indicated for that term in the
third recital of this Agreement.
"NOCO PROPERTIES" shall have the meaning indicated for that term in the
second recital of this Agreement.
"ORIGINAL AGREEMENT" means that certain Agreement of Limited Partnership
dated April 14, 1992, as amended, among the General Partner and the Current
Limited Partners, as amended pursuant to that certain agreement entitled
Amendment of Limited Partnership Agreement dated April 14, 1992.
"PARTNER" and "PARTNERS" means the General Partner and the Limited
Partners where no distinction is specified by the context in which the term is
used.
"PARTNERSHIP ACT" means the Delaware Revised Uniform Limited Partnership
Act, 6 Del. C. ss.17-101, ET. SEQ., as amended from time to time.
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"PARTNERSHIP INTEREST" or "INTEREST" means with respect to a specific
Partner or Assignee, the interest of a Partner or Assignee in the profits,
losses, distributions and capital in the Partnership pursuant to this Agreement,
and the rights granted under this Agreement to a Partner.
"POST-CONVERSION SHARING RATIOS" shall mean the ratio determined for
each Partner and Assignee based on the relative capital account balances of all
of the Partners and Assignees as of the Anniversary Date, as adjusted pursuant
to Section 10.4.
"PRE-CONVERSION SHARING RATIOS" shall mean the ratios set forth on
Exhibit "D".
"PREFERRED LIMITED PARTNERS" means the persons listed on Exhibit "B".
"PREFERRED RETURN" means for each Preferred Limited Partner a sum
equivalent to six percent per annum, cumulative but not compounded (prorated for
any partial year), of the Adjusted Initial Capital Balance from time to time of
the Preferred Limited Partner, which sum begins to accrue on the Effective Date
and ceases to accrue on the Anniversary Date.
"PREFERRED RETURN SHORTFALL" means, with respect to each Preferred
Limited Partner, the excess of the Preferred Return of that Preferred Limited
Partner as of the date in question over the amount of Net Income previously
allocated to such Preferred Limited Partner pursuant to Section 9.6.
"PRIORITY DISTRIBUTION AMOUNT" means with respect to a fiscal year of
the Partnership the sum of (i) the franchise taxes imposed on the General
Partner during such year, (ii) the product of multiplying: (a) the highest
marginal tax rate which is applicable to individuals under the U.S. federal
income tax laws during that fiscal year, by (b) the amount of taxable income and
gain allocated to the General Partner with respect to that fiscal year (the
"INCOME ITEMS"), net of any items of deduction or loss allocated to the General
Partner by the Partnership with respect to that fiscal year which may be
deducted against such Income Items by the members of the General Partner, plus
(iii) the cumulative Priority Distribution Amounts which have not been
distributed to the General Partner with respect to previous fiscal years.
"REGISTRATION RIGHTS AGREEMENT" means that certain Registration Rights
Agreement by and between New Xxxxxx and NOCO Enterprises dated September 16,
1994.
"SHARING RATIOS" shall mean (i) with respect to the period beginning on
the Effective Date and ending on the Anniversary Date, the Pre-Conversion
Sharing Ratios, and (ii) with respect to the period subsequent to the
Anniversary Date, the Post-Conversion Sharing Ratios.
"STOCKHOLDERS' AGREEMENT" means that certain Stockholders' Agreement
dated September 16, 1994, among NOCO Enterprises and certain of the other
stockholders of New Xxxxxx.
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SECTION 3.A.2 CONSTRUCTION. Except to the extent the context
specifically indicates otherwise, all references to articles and sections refers
to articles and sections of this Agreement, and all references to the exhibits
and schedules refers to exhibits and schedules attached hereto, each of which is
made a part hereof for all purposes.
ARTICLE IV.
BUSINESS PURPOSES OF THE PARTNERSHIP
The purposes of the Partnership shall be limited to:
i) holding its ownership interests in NOCO Consortium, NOCO
Properties and NOCO Enterprises;
ii) receiving allocations and distributions from NOCO Consortium,
NOCO Properties, and NOCO Enterprises, and benefiting from the
future appreciation in the value of the ownership interest of
the Partnership in said entities;
iii) permitting NOCO Enterprises to dispose of the Xxxxxx Shares;
iv) entering into such other ventures and activities as the General
Partner shall deem appropriate; and
v) engaging in any and all activities as the General Partner, in
its sole discretion, deems to be reasonably necessary or
appropriate in relation to the purposes described above.
ARTICLE V.
PRINCIPAL PLACE OF BUSINESS
The principal place of business of the Partnership shall be 0000 Xxxxxx
Xxxx, Xxxxxxxxxx, Xxxxxxxx. The General Partner may, in its discretion from time
to time, change the principal place of business of the Partnership.
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ARTICLE VI.
TERM
The term of the Partnership commenced on April 14, 1992, pursuant to the
Original Agreement and shall terminate on December 31, 2010, unless the
Partnership is sooner liquidated or dissolved in accordance with this Agreement.
ARTICLE VII.
CAPITAL CONTRIBUTIONS
SECTION 7.A.1 INITIAL CONTRIBUTIONS OF THE CURRENT LIMITED PARTNERS. As
of the date of the formation of the Partnership, in exchange and in
consideration for their respective Partnership Interests, the Current Limited
Partners and/or their predecessors in interest contributed to the Partnership an
aggregate of 46,128 shares of the Common Stock of NOCO Consortium, $1.00 par
value per share.
SECTION 7.A.2 INITIAL CONTRIBUTION OF THE GENERAL PARTNER. In connection
with the formation of the Partnership, in exchange and in consideration of its
Partnership Interest, the General Partner contributed to the Partnership U.S.
$152,092.00.
SECTION 7.A.3 CONTRIBUTION OF THE PREFERRED LIMITED PARTNERS. As of the
Effective Date, in exchange and in consideration for their respective
Partnership Interests, each of the Preferred Limited Partners hereby contributes
to the capital of the Partnership the amount of the Debt indicated on Exhibit
"B". Each Preferred Limited Partner will deliver to the Partnership the
promissory notes, security agreements, and other documents which evidence the
Debt. Xxxx. Xxxxx Finance Limited ("FOF"), one of the Preferred Limited
Partners, will continue to be owed $1,000,000.00 by the Partnership (the
"CONTINUING INDEBTEDNESS"). The Partnership shall deliver to FOF such notes and
other documents as are necessary to evidence the Continuing Indebtedness
containing such terms and conditions as are deemed reasonable and appropriate by
the General Partner.
SECTION 7.A.4 CAPITAL ACCOUNTS. An individual capital account shall be
maintained for each Partner, as follows:
i) each capital account shall be credited with:
a) the amount of cash and agreed value of any property
contributed by the Partner to the Partnership;
b) that Partner's distributive share of the income and gain
of the Partnership; and
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c) the amount of any Partnership liability: (1) which is
treated as assumed by the Partner under Treasury
Regulation Section 1.704-1(b)(2)(iv)(c), or (2) which is
secured by property distributed by the Partnership to
the Partner to the extent such Partner is considered to
assume such liabilities for purposes of Code Section
752.
ii) each capital account shall be debited with:
a) the amount of cash distributed to the Partner by the
Partnership and the fair market value of any property
distributed by the Partnership to the Partner;
b) that Partner's distributive share of deductions and
losses of the Partnership;
c) the amounts withheld and paid over to the IRS or any
other taxing authorities by the Partnership pursuant to
Code Sections 1441, 1445, 1446, or any similar statute
with respect to the tax liability of the Partner; and
d) the amount of any liabilities of a Partner which the
Partnership is treated as assuming: (1) under Code
Section 752 due to the contribution by the Partner of
encumbered property to the Partnership or (2) under
Treasury Regulation Section 1.704-1(b)(2)(iv)(c).
iii) as of the dates indicated below, the capital accounts of all of
the Partners shall be adjusted to reflect a revaluation of the
properties of the Partnership on the books of the Partnership to
their fair market values in accordance with Treasury Regulation
Section 1.704-1(b)(2)(iv)(f), with the capital accounts of all
of the Partners and the Assignees (if any) adjusted to reflect
the manner in which the unrealized income, gain, loss or
deduction inherent in such properties would be allocated among
the Partners and Assignees if there were a taxable disposition
of such property for their fair market values as of such date
(which, with respect to the Xxxxxx Shares, shall equal the
Market Price):
a) on the Anniversary Date, and
b) on the liquidation of the Partnership or on the date of
a distribution by the Partnership to a retiring or
continuing Partner of money or other property (other
than de minimis
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amount) by the Partnership to a retiring or continuing
Partner as consideration for an interest in the
Partnership.
iv) notwithstanding any provision hereof to the contrary (except
Section 10.1):
a) all capital accounts shall be maintained in accordance
with Treasury Regulation Section 1.704-1(b)(2)(iv);
b) positive capital accounts shall be adjusted downward for
the items described under (4), (5), and (6) of the
second sentence of Treasury Regulation Section
1.704-1(b)(2)(ii)(d) that are reasonably expected to
occur in the manner required under Treasury Regulation
Section 1.704-1(b)(2)(ii)(d);
c) no Limited Partner shall be obligated to any other
Partner, the Partnership or anyone else, to contribute
any sums to the Partnership with respect to a negative
capital account; and
d) in the event that all or a portion of a Partnership
Interest is transferred in accordance with the terms of
this Agreement, the transferee shall succeed to the
capital account of the transferor to the extent it
relates to the transferred Interest.
SECTION 7.5 TAX WITHHOLDING LIABILITY. To the extent the Partnership is
required to withhold and pay over to any taxing authority pursuant to Code
Sections 1441, 1445, or 1446 or any similar statute with respect to the tax
liability of any Partner or Assignee, such Partner or Assignee shall contribute
to the Partnership, upon demand from the General Partner, the amount so required
to be withheld.
SECTION 7.6 TAX LIABILITY OF THE GENERAL PARTNER AND ITS MEMBERS. To the
extent that as of April 15th of any year the Partnership does not have an amount
of liquid assets sufficient to permit cash distributions to the General Partner
at least equal to the Priority Distribution Amount (as defined in Article VIII)
with respect to the previous year, each Limited Partner and Assignee shall, upon
written notice from the General Partner, contribute its pro rata share of the
amount of such deficit, based on relative Sharing Ratios as of such date.
ARTICLE VIII.
DISTRIBUTIONS
SECTION 8.A.1 DISTRIBUTIONS PRIOR TO ANNIVERSARY DATE. The Partnership
may not make any distributions to any Limited Partner on or before the
Anniversary Date without the consent of the General Partner, a Majority in
Interest of the Current Limited Partners, and a Majority in Interest of the
Preferred Limited Partners. Any distributions of Xxxxxx Shares so authorized
shall only be made
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to the extent such distributions are not prohibited by applicable securities
laws and the agreements entered into in connection with the Consolidation.
SECTION 8.A.2 SUBSEQUENT DISTRIBUTIONS. Subject to Article X, subsequent
to the Anniversary Date, the General Partner may in its discretion distribute
from time to time such amounts of cash and property as it determines to be
appropriate to Partners with positive capital account balances in the proportion
of their respective positive capital account balances.
SECTION 8.A.3 DISTRIBUTIONS TO THE GENERAL PARTNER. Notwithstanding the
other provisions of this Article VIII, the Partnership shall distribute to the
General Partner in each fiscal year an amount at least equal to the "Priority
Distribution Amount" for that fiscal year, regardless of whether the Limited
Partners receive any distributions.
ARTICLE IX.
ALLOCATIONS
SECTION 9.A.1 SHARING RATIOS. Except as provided in the remainder of
this Article IX, Net Income and Net Loss shall be allocated to the General
Partner and the Limited Partners and their respective Assignees in accordance
with their relative Sharing Ratios.
SECTION 9.A.2 YEAR WHICH INCLUDES THE EFFECTIVE DATE. Except as provided
in the remainder of this Article IX, Net Income or Net Loss realized in the year
which includes the Effective Date shall be prorated on a daily or other
reasonable basis and allocated among the Partners and Assignees taking into
account the Pre-Conversion Sharing Ratios with respect to items allocable to the
period beginning on the Effective Date, and in accordance with the ratios set
forth in the Original Agreement with respect to items allocable to the period
prior to the Effective Date.
SECTION 9.A.3 YEAR OF THE ANNIVERSARY DATE. Except as provided in the
remainder of this Article IX, that portion of the Net Income and Net Loss
attributable to the adjustment pursuant to Section 7.4(iii) of the value of the
Xxxxxx Shares to equal to the Market Price on the Anniversary Date shall be
allocated among the Partners and the Assignees in accordance with their Pre-
Conversion Sharing Ratios. All other items of income, gain, loss, and deduction
realized in the year which includes the Anniversary Date shall be prorated on a
daily or other reasonable basis and allocated among the Partners and Assignees
taking into account the applicable Sharing Ratios of the Partners on each such
day.
SECTION 9.A.4 DEFICIT CAPITAL ACCOUNT. Any allocation of Net Loss to a
Limited Partner or Assignee pursuant to Sections 9.1, 9.2 or 9.3 which would
cause or increase an Adjusted Capital Account Deficit with respect to such
Limited Partner or Assignee shall be allocated to the General Partner.
SECTION 9.A.5 GAIN CHARGEBACK. If in any year any amounts of Net Loss
are allocated to the General Partner pursuant to Section 9.2 of the Original
Agreement or Section 9.4 so as cause or
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increase a negative capital account balance with respect to the General Partner,
and in any subsequent period the Partnership has Net Income, then prior to the
making of any allocations under Sections 9.1, 9.2 or 9.3, the Net Income of such
year shall be allocated to the General Partner in such amounts as are necessary
to eliminate its negative capital account balance.
SECTION 9.A.6 PREFERRED RETURN. If in any year (including a year which
includes the Effective Date or a Anniversary Date), the Partnership realizes Net
Income in excess of the amount required to make the allocations required
pursuant to Section 9.5, such Net Income shall be allocated, prior to the making
of any allocation pursuant to Section 9.1, 9.2 or 9.3, to the Preferred Limited
Partners and their respective Assignees in proportion to and to the extent of
their relative Preferred Return Shortfall as of the date of such allocation, if
any.
SECTION 9.A.7 SPECIAL ALLOCATIONS. The following special allocations are
required to be made pursuant to the requirements of Treasury Regulation Section
1.704-1(b) due to the fact that the Limited Partners and Assignees do not have
the obligation to restore negative capital accounts, and therefore shall be made
in the following order:
i) QUALIFIED INCOME OFFSET. In the event any of the Limited
Partners or the Assignees unexpectedly receive any adjustments,
allocations, or distributions described in (4), (5), and (6) of
the second sentence of Treasury Regulation Sections
1.704-1(b)(2)(ii)(d), items of Partnership income and gain shall
be specially allocated to such Limited Partner or Assignee in an
amount and manner sufficient to eliminate, to the extent
required by the Regulations, the Adjusted Capital Account
Deficit, if any, of the Limited Partner or Assignee as quickly
as possible, provided that an allocation pursuant to this
Section 9.7(i) shall be made only if and to the extent that the
Limited Partner would have an Adjusted Capital Account Deficit
after all other allocations provided for in this Article IX have
been tentatively made as if this Section 9.7(i) were not in this
Agreement.
ii) GROSS INCOME ALLOCATION. In the event any of the Limited
Partners or the Assignees have an Adjusted Capital Account
Deficit at the end of any Partnership fiscal year, the Limited
Partner or Assignee shall be specially allocated items of
Partnership income and gain in the amount of such Adjusted
Capital Account Deficit as quickly as possible, provided that an
allocation pursuant to this Section 9.7(ii) shall be made only
if and to the extent that the Limited Partner or Assignee would
have Adjusted Capital Account Deficit after all other
allocations provided for in this Article IX have been
tentatively made as if Section 9.7(i) and this Section 9.7(ii)
were not in this Agreement.
SECTION 9.A.8 CURATIVE ALLOCATIONS. The special allocations set forth in
Section 9.7 (the "REGULATORY ALLOCATIONS") are intended to comply with certain
requirements of Treasury Regulation
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Section 1.704-1(b). Notwithstanding any other provisions of this Article IX
(other than the Regulatory Allocations), the Regulatory Allocations shall be
taken into account in allocating other items of income, gain, loss, and
deduction among the Partners so that, to the extent possible, the net amount of
such allocations and the Regulatory Allocations to each Partner shall be equal
to the net amount that would have been allocated to each such Partner if the
Regulatory Allocations had not occurred.
SECTION 9.A.9 CODE SECTION 754 ADJUSTMENT. To the extent an adjustment
to the adjusted tax basis of a Partnership asset pursuant to Code Section 734(b)
or Code Section 743(b) 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 gain or loss shall be 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
Regulations.
ARTICLE X.
LIQUIDATION OF A LIMITED PARTNER
SECTION 10.A.1 COMPLETE LIQUIDATION. A Limited Partner may at any time
subsequent to the Anniversary Date elect for its Interest to be liquidated as
provided in this Article X by delivering written notice of the same to the
General Partner (the "LIQUIDATION NOTICE"). In order to effect such a
liquidation, the General Partner must transfer to the Limited Partner money
and/or assets (the "DISTRIBUTED ASSETS"), the value of which the General Partner
believes in good faith equals the capital account balance of such Limited
Partner as of the date of the Liquidation Notice (including any adjustment
required to the capital account of the Limited Partner pursuant to Section
7.4(iii)), which distribution shall include, to the extent possible, that
Limited Partner's pro rata share of the Xxxxxx Shares (based on relative capital
account balances).
SECTION 10.A.2 DETERMINATION OF VALUE. The value of any Distributed
Assets which are not Xxxxxx Shares shall be irrefutably presumed to equal their
adjusted bases for tax purposes. The value of any Xxxxxx Shares which are
Distributed Assets will be deemed to equal the Market Price as of the date of
their distribution (after taking into account the trading price of such shares
over the preceding twenty trading days as required pursuant to Article III).
SECTION 10.A.3 EFFECT OF LIQUIDATION AND TERMINATION. Upon the
liquidation of the Interest of a Limited Partner pursuant to this Article X, the
Sharing Ratio otherwise attributable to the Interest of such Limited Partner
shall be immediately reallocated to the remaining Partners and Assignees in
proportion to relative amounts of their Sharing Ratios prior to such
liquidation.
SECTION 10.A.4 PARTIAL LIQUIDATION. If any Limited Partner receives
subsequent to the Anniversary Date distributions which, when compared to the
distributions received by the other Partners, is not proportionate to the
relative Post-Conversion Sharing Ratios of the Partners, the
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Post-Conversion Sharing Ratios shall be adjusted with respect to items of income
and loss accruing subsequent to the date of such distribution as necessary to
equitably reflect the effect of such disproportionate distribution.
ARTICLE XI.
BOOKS OF ACCOUNT; RECORDS AND REPORTS
SECTION 11.A.1 BOOKS AND RECORDS. Correct and complete records and books
of account shall be kept by the General Partner in which shall be entered fully
and accurately all transactions and other matters relating to the Partnership's
business as are usually entered into records and books of account maintained by
persons engaged in businesses of like character. The books and records shall at
all times be maintained at the principal office of the Partnership and shall be
open to the reasonable inspection and examination of the Partners or Assignees
or their duly authorized representatives during reasonable business hours.
SECTION 11.A.2 METHODS OF ACCOUNTING. The Partnership will utilize such
method or methods of accounting as the General Partner shall determine. The
General Partner shall have the right to make all elections required or permitted
to be made for federal income tax purposes, including the elections under Code
Sections 754 and 263(c).
SECTION 11.A.3 ANNUAL REPORTS. Within one hundred twenty (120) days
after the end of each fiscal year, the General Partner shall send to each person
who was a Partner or Assignee in the Partnership at the end of the fiscal year
then ended an unaudited balance sheet as of the end of such fiscal year and
unaudited statements of income, Partners' equity and changes in financial
position for such fiscal year with respect to the Partnership, and such other
statements the General Partner deems appropriate.
SECTION 11.A.4 TAX INFORMATION. The General Partner shall send to each
Partner and Assignee all Partnership tax information as shall be necessary for
the preparation by such person of its U.S. Federal income tax return within the
time period required pursuant to the Code.
SECTION 11.A.5 OTHER INFORMATION. Upon 30 days advance written notice,
each Limited Partner shall have the right to obtain from the Partnership all
information to which it is entitled pursuant to Section 17-305 of the
Partnership Act, if the request for such information states a proper purpose
under the Partnership Act.
SECTION 11.A.6 LIMITATION. The rights of a Limited Partner to receive
information pursuant to this Article X shall be subject to the limitations of
Section 17-305(b) of the Partnership Act concerning confidential information,
trade secrets, and similar matters.
ARTICLE XII.
STATUS OF LIMITED PARTNERS
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SECTION 12.A.1 NO PARTICIPATION OR CONTROL. The Limited Partners shall
not participate in the management or control of the Partnership's business nor
shall they have any power to act for or bind the Partnership, such powers being
vested solely and exclusively in the General Partner.
SECTION 12.A.2 LIMITED LIABILITY. The Limited Partners shall not have
any personal liability whatsoever for the debts of the Partnership or any of its
losses beyond the amount contributed by the Limited Partners to the capital of
the Partnership.
SECTION 12.A.3 DISSOLUTION OR BANKRUPTCY. The termination, dissolution
or bankruptcy of a Limited Partner shall not cause a dissolution of the
Partnership, but the rights of such Limited Partner to share in the profits and
losses of the Partnership, to receive distributions of Partnership funds and to
assign a Partnership Interest pursuant to Article XIV shall, on the happening of
such an event, devolve upon such Limited Partner's successors, assigns or
representatives, subject to the terms and conditions of this Agreement, and the
Partnership shall continue as a limited partnership. Any such successor, assign
or representative shall only become a substitute Limited Partner in accordance
with Article XIV.
ARTICLE XIII
POWERS, RIGHTS AND DUTIES OF THE GENERAL PARTNER
SECTION 13.A.1 CONTROL AND MANAGEMENT. Subject to the limitations
imposed by law and this Agreement, the General Partner shall have exclusive
authority to manage the operations and affairs of the Partnership and to make
all decisions regarding the business of the Partnership. Pursuant to the
immediately preceding sentence, it is understood and agreed that the General
Partner shall have all of the rights and powers of a general partner as provided
in the Partnership Act and as otherwise provided by law, and any action taken by
the General Partner on behalf of the Partnership shall constitute the act of and
serve to bind the Partnership. In dealing with the General Partner when acting
on behalf of the Partnership, no person shall be required to inquire into the
authority of the General Partner to bind the Partnership.
SECTION 13.A.2 DUTIES OF THE GENERAL PARTNER. The General Partner shall
use its best efforts to carry out the Partnership purposes and shall devote such
time as necessary to the Partnership business. The General Partner shall be
under a fiduciary duty to conduct the affairs of the Partnership in the best
interests of the Partnership and of the Limited Partners, including the
safekeeping and use of all of the Partnership property and the use thereof for
the exclusive benefit of the Partnership.
SECTION 13.A.3 MANAGEMENT BY GENERAL PARTNER. Subject to the limitations
and restrictions set forth in this Agreement, including without limitation those
set forth in this Article XIII, the General Partner on behalf of the Partnership
may without the consent of any of the other Partners:
i) cause the Partnership to assume the Debt, and thereafter from
time to time, restructure, amend, renew, extend or prepay the
Debt;
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ii) cause the Partnership to make any of the distributions permitted
pursuant to Articles VIII or X;
iii) cause the Partnership and/or NOCO Enterprises to sell,
distribute or otherwise dispose of all or any portion of the
Xxxxxx Shares for such consideration and pursuant to such terms
as it deems appropriate, including, in its discretion, causing
the Partnership or NOCO Enterprises to exercise any of the
rights granted to NOCO Enterprises pursuant to the Registration
Rights Agreement;
iv) cause the Partnership and/or NOCO Enterprises to exercise any of
the rights granted to NOCO Enterprises and its assignees
pursuant to the Stockholders' Agreement, including, but not
limited to, the right to: (a) purchase shares offered by a
Xxxxxx Family Stockholder (as defined in the Stockholders'
Agreement), and (b) elect directors pursuant to Section 4.1
thereof;
v) the pledge or encumbrances of any of the assets of the
Partnership, including the Xxxxxx Shares, for any purpose;
vi) appoint the officers and directors of NOCO Consortium and NOCO
Properties;
vii) take such actions as are necessary to fulfill the Partnership
purposes set forth in Article IV;
viii) purchase from or through others, contracts of liability,
casualty, or other insurance for the protection of the
properties or affairs of the Partnership or the Partners, or for
any purpose convenient or beneficial to the Partnership;
ix) establish, maintain, and supervise the deposit of any monies or
securities of the Partnership with federally insured banking
institutions or other institutions as may be selected by the
General Partner in accounts in the name of the Partnership with
such institutions; and
x) withhold and pay over to the IRS such amounts from the
distributive share of the Partners as shall be required by the
Code, including specifically, but not limited to, Code Sections
1441, 1445 and 1446.
SECTION 13.A.4 RESTRICTIONS ON THE GENERAL PARTNER. Notwithstanding
Section 13.3, the General Partner may undertake any of the following actions on
behalf of the Partnership only with the consent of both a Majority in Interest
of the Current Limited Partners and a Majority in Interest of the Preferred
Limited Partners:
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i) the admission of additional Partners into the Partnership; or
ii) the merger or consolidation of the Partnership with any other
entity.
SECTION 13.A.5 TAX MATTERS PARTNER. The General Partner shall be the
"Tax Matters Partner" (as defined in the Code) with respect to the determination
of all U.S. federal tax matters required to be determined for the Partnership by
the Code. The General Partner may resign from such position fifteen (15) days
after giving to the other Partners written notice of its intention to resign.
The General Partner shall be considered to have resigned as Tax Matters Partner
if a Withdrawal of the General Partner occurs. In the event of a vacancy in the
position of Tax Matters Partner, a successor Tax Matters Partner may be
designated by a vote of a Majority in Interest of both the Current Limited
Partners and a Majority in Interest of the Preferred Limited Partners.
SECTION 13.A.6 REMOVAL OF GENERAL PARTNER. The General Partner may be
removed at any time for any reason as a general partner of the Partnership upon
the vote of seventy percent (70%) or more of the Limited Partners (based on
relative Sharing Ratios) and the delivery of written notice (the "REMOVAL
NOTICE") of such vote to the General Partner. In the event of the removal of the
General Partner pursuant to this Section 13.6 and the reconstitution of the
Partnership pursuant to Section 15.2, the Partnership Interest of the General
Partner shall be converted into an interest with the rights, powers, and
economic interests of an Assignee.
SECTION 13.A.7 INDEMNIFICATION. If the General Partner or any of its
members (collectively, the "INDEMNIFICATION PARTIES") is made a party to or is
threatened to be made a party to or is involved in any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative,
arbitrative or investigative (hereinafter a "PROCEEDING"), or any appeal in such
a Proceeding, or any inquiry or investigation that could lead to a Proceeding,
by reason of the fact that it or he is or was acting on behalf of the
Partnership pursuant to the Agreement, the Indemnification Party shall be
indemnified by the Partnership to the fullest extent permitted by law against
judgments, penalties (including excise and similar taxes and punitive damages),
fines, settlements and reasonable expenses (including, without limitation,
attorneys' fees) actually incurred by the Indemnification Party in connection
with such Proceeding, and indemnification under this Section 13.7 shall continue
as to an Indemnification Party who has ceased to serve in the capacity which
initially entitled such Indemnification Party to indemnity hereunder. No
amendment, modification or repeal of this Section 13.7 shall have the effect of
limiting or denying any rights of an Indemnification Party under this Section
13.7 with respect to actions taken or Proceedings arising prior to any such
amendment, modification or repeal. IT IS EXPRESSLY ACKNOWLEDGED THAT THE
INDEMNIFICATION PROVIDED IN THIS SECTION 13.7 COULD INVOLVE INDEMNIFICATION FOR
DAMAGES WHICH ARISE IN WHOLE OR IN PART FROM THE NEGLIGENCE OF THE
INDEMNIFICATION PARTY OR UNDER THEORIES OF STRICT LIABILITY. The right to
indemnification conferred in this Section 13.7 shall include the right to be
paid or reimbursed by the Partnership for the reasonable expenses incurred by a
Indemnification Party who was, is or is threatened to be made a named defendant
or respondent in a Proceeding in advance of the final disposition of the
Proceeding and without any determination
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as to the Indemnification Party's ultimate entitlement to indemnification;
provided, however, that the payment of such expenses incurred by any such
Indemnification Party in advance of the final disposition of a Proceeding shall
be made only upon delivery to the Partnership of written affirmation by such
Indemnification Party of his or its good faith belief that he or it has met the
standard of conduct necessary for indemnification under this Section 13.7 and a
written undertaking, by or on behalf of such Indemnification Party, to repay all
amounts so advanced if it shall ultimately be determined that such
Indemnification Party is not entitled to be indemnified by the Partnership under
this Section 13.7 or otherwise.
SECTION 13.A.8 ADVANCE OR REIMBURSEMENT OF EXPENSES. The Partnership
shall advance to the General Partner or shall reimburse the General Partner for
any and all expenses incurred by the General Partner in its capacity as the
General Partner of the Partnership. The business of the General Partner
currently is devoted exclusively to the business of the Partnership, thus, so
long as such arrangement continues, all expenses reasonably incurred by the
General Partner in connection with its operations (e.g., preparation of tax
returns of the General Partner) shall be considered expenses of the Partnership.
ARTICLE XIV.
TRANSFER OF INTERESTS BY PARTNERS
SECTION 14.A.1 IN GENERAL. A Partner may assign all or any part of its
Partnership Interest; provided, however, such assignment shall not confer upon
the assignee thereof any right to become a substituted Partner. The transferee
of all or any portion of an Interest of a Limited Partner shall be admitted as a
substituted Limited Partner with respect to such Partnership Interest only with
the written consent of a Majority in Interest of the Preferred Limited Partners
and a Majority in Interest of the Current Limited Partners, which may be given
or withheld in their sole and absolute discretion. Any transferee from the
General Partner of an Interest shall be admitted as a substituted General
Partner only in accordance with Sections 14.2 and 14.3. Unless and until any
assignee, transferee, heir or legatee of a Partner becomes a substituted Partner
in accordance with this Article XIV, the status and rights of such assignee with
respect to the Interest which has been assigned to it shall be limited to the
rights under Section 17-702 of the Partnership Act of an assignee of a
partnership interest which has not been admitted as a partner pursuant to
Section 17-703 of the Partnership Act.
SECTION 14.A.2 TRANSFER PROCEDURE. Any Partner or Assignee who desires
to transfer all or any part of its Partnership Interest shall arrange for its
transferee to be bound by the provisions of this Agreement, as it may then be
amended, by having such transferee execute two counterparts of an agreement of
assignment satisfactory in form to the General Partner and by delivering the
same to the General Partner, together with:
i) an opinion of counsel satisfactory to the General Partner that
the transfer may be effectuated without registration under the
U.S. Securities Act of 1933, as
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amended (the "1933 ACT"), and any applicable state securities
laws, if required by the General Partner, and
ii) such other information as may be required (a) by counsel to the
General Partner to determine whether the proposed transfer
violates applicable federal or state securities laws or other
laws or regulations or the terms of this Agreement, and (b) by
the Partnership to enable it to timely file a completed Form
8308 with the IRS.
Each assignment or transfer shall be effective as of the first day of the
calendar month during which the General Partner actually receives an instrument
of assignment executed by both the transferor and transferee of the Partnership
Interest satisfactory in form to the General Partner; provided, however, that no
attempted assignment or transfer shall be effective or recognized by the
Partnership or the Partners until compliance with all of the requirements of
this Section 14.2.
SECTION 14.A.3 TRANSFER BY THE GENERAL PARTNER. The General Partner may
assign all or any part of its Interest. The assignee of the General Partner
shall, without the consent of any of the Partners, succeed to the economic
rights of the General Partner under Articles VIII, IX, and XVI to the extent
assigned, but shall only succeed to any of the other rights of the General
Partner with the consent of a Majority in Interest of the Current Limited
Partners and a Majority in Interest of the Preferred Limited Partners. A
transfer by the General Partner of its Interest in the Partnership shall not
relieve it of any of its obligations to the Partnership unless a Majority in
Interest of the Limited Partners agree otherwise.
SECTION 14.A.4 TRANSFER TO AFFILIATES. A corporation (an "AFFILIATED
CORPORATION") which (i) is controlled, directly or indirectly, by a Limited
Partner or the persons who control the Limited Partner, and (ii) receives an
assignment of the Interest of such Limited Partner, shall be admitted as a
Limited Partner without the approval of the Majority in Interest of the Current
Limited Partners and a Majority in Interest of the Preferred Limited Partners in
the manner otherwise required pursuant to Section 14.1 if the transfer to the
Affiliated Corporation is made in compliance with Section 14.2.
SECTION 14.A.5 HYPOTHECATION. Any hypothecation, mortgage, pledge or
collateralization of an Interest is expressly prohibited and any such purported
hypothecation, mortgage, pledge or collateralization in any manner by any person
shall be null and void and of no legal effect.
SECTION 14.A.6 TAX CONSEQUENCES. Notwithstanding anything to the
contrary set forth herein, no transfer or assignment of a Partnership Interest
(whether or not such assignee or transferee becomes a substituted Partner) shall
be effective without the consent of the General Partner if it causes, by virtue
of such transfer and all previous transfers, the termination of the Partnership
for purposes of Section 708 of the Code or any similar provision enacted in lieu
thereof.
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ARTICLE XV.
DISSOLUTION OF THE PARTNERSHIP
SECTION 15.A.1 CAUSES OF DISSOLUTION. The happening of any one of the
following events shall cause the immediate dissolution of the Partnership:
i) unless the Partnership is reconstituted in accordance with
Section 15.2:
a) the removal of the General Partner pursuant to Section
13.6;
b) the assignment by the General Partner of all of its
Interest unless the assignee of the General Partner is
admitted as a General Partner pursuant to Section 15.3;
or
c) the violation by the General Partner of the prohibition
set forth in Section 7.3(i)(a) against it withdrawing
from the Partnership,
ii) at any time subsequent to two years after the Effective Date, a
written consent to the dissolution is executed by Partners
holding 75% of the Sharing Ratios in the Partnership;
iii) the entry of a decree of judicial dissolution pursuant to
Section 17-802 of the Partnership Act; or
iv) the expiration of the term of the Partnership as provided in
Article VI, unless all Partners agree to extend the term of the
Partnership past the date set forth in Article VI.
SECTION 15.A.2 RECONSTITUTION AFTER DISSOLUTION. The Partnership may be
reconstituted and its business continued in the event of the dissolution of the
Partnership pursuant to Section 15.1(i) upon the execution of a written
instrument by Majority in Interest of the Current Limited Partners and a
Majority in Interest of the Preferred Limited Partners which (i) is delivered to
the other Partners and Assignees, if any, within 90 days of the date of the
terminating event, and (ii) elects a new General Partner or General Partners. As
soon as practical thereafter, the new General Partner and the Limited Partners
shall execute an appropriate amendment to this Agreement evidencing the
appointment of the new General Partner.
ARTICLE XVI.
DISSOLUTION PROCEDURE
SECTION 16.A.1 LIQUIDATOR APPOINTMENT; POWERS. If the Partnership is
dissolved for any reason and the Partnership is not reconstituted pursuant to
Section 15.2, the General Partner (or if any event described in 15.1(i) has
occurred, a liquidator or liquidating committee selected by a
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Majority in Interest of the Current Limited Partners) shall commence to wind up
the affairs of the Partnership and to the extent deemed advisable liquidate and
sell the assets of the Partnership. The party or parties actually conducting the
liquidation in accordance with the foregoing sentence, whether the General
Partner, a liquidator, or a liquidating committee, shall hereinafter be referred
to in this Section 16.1 as the "Liquidator." The Liquidator shall have full
right and unlimited discretion to determine whether to sell the assets of the
Partnership and the time, manner and terms of any sale or sales of the
Partnership property having due regard to the activity and condition of the
relevant market and general financial and economic conditions. A Liquidator
other than the General Partner shall be entitled to receive compensation for its
services as agreed upon by it and a Majority in Interest of the Limited
Partners. The Liquidator may be removed at any time for reasonable cause by
written notice of removal signed by a Majority in Interest of the Limited
Partners (exclusive of the Interests held by the Liquidator or its Affiliates).
Upon the death, dissolution, removal or resignation of the Liquidator, a
successor and substitute Liquidator (who shall have and succeed to all of the
rights, powers and duties of the original Liquidator) will, within 30 days
thereafter, be appointed by the vote of a Majority in Interest of the Limited
Partners evidenced by written appointment and acceptance. The right to appoint a
successor substitute Liquidator in the manner provided herein shall be recurring
and continuing for so long as the functions and services of the Liquidator are
authorized to continue under the provisions hereof, and every reference herein
to the Liquidator will be deemed to refer also to any successor or substitute
Liquidator appointed in the manner herein provided. Except as expressly provided
in this Article XVI, the Liquidator shall have and may exercise, without further
authorization or consent of any of the parties hereto or their legal
representatives or successors in interest, all of the powers conferred upon the
General Partner under the terms of this Agreement to the extent necessary or
desirable to complete the liquidation and dissolution of the Partnership.
SECTION 16.A.2 APPOINTMENT. If, within 30 days following the date of
dissolution or other time period provided in Section 16.1, a Liquidator or
successor Liquidator has not been appointed in the manner provided therein, any
interested party shall have the right to make application to the then Senior
Judge of the United States District Court for the Southern District of Texas for
appointment of a Liquidator or successor Liquidator, and such Judge, acting as
an individual and not in his judicial capacity, shall be fully authorized and
empowered to appoint and designate a Liquidator or successor Liquidator who
shall have all the powers, duties, rights and authorities of the Liquidator
herein provided.
SECTION 16.A.3 RESERVES. After making payment or provision for payment
of all debts and liabilities of the Partnership and all expenses of liquidation,
the Liquidator may set up cash reserves as he may deem reasonably necessary for
any contingent or unforeseen liabilities or obligations of the Partnership.
SECTION 16.A.4 ALLOCATIONS AND DISTRIBUTIONS. The Partners shall
continue to share distribu tions, profits and losses during the period of
liquidation in accordance with Articles VIII and IX. Upon the winding up and
termination of the business and affairs of the Partnership, the remaining assets
of the Partnership shall be sold as and to the extent the Liquidator determines,
the gains or
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losses from such sales shall then be allocated to the capital accounts of the
Partners and Assignees, the liabilities and obligations of the Partnership shall
be paid (including any Accrued Preferred Returns) and all of such expenses shall
be charged to the accounts of the Partners and Assignees as required under
applicable federal income tax principles. The General Partner shall then restore
to the Partnership the amount of any Adjusted Capital Account Deficit in its
capital account. Thereafter, the remaining assets of the Partnership shall be
distributed to the Partners and Assignees in accordance with and to the extent
of the positive capital accounts of the Partners and Assignees, after giving
effect to any adjustments required pursuant to Treasury Regulation Section
1.704- 1(b)(2)(iv)(e), and thereafter among the Partner and the Current Limited
Partners and Assignees in accordance with their relative Sharing Ratios. In
order to comply with Treasury Regulation Section 1.704-1(b), all proceeds other
than the reserves retained pursuant to Section 16.3 shall be distributed by the
end of the taxable year of liquidation, or if later, ninety (90) days after the
date of liquidation. To comply with the requirements of the preceding sentence,
the Liquidator may declare that it is holding any of the assets of the
Partnership in a liquidating trust for the benefit of the Partners.
SECTION 16.A.5 FINAL ACCOUNTING. The Liquidator shall, within a
reasonable time following the completion of the liquidation of the Partnership,
provide to each of the Partners and Assignees a statement which shall set forth
the assets and the liabilities of the Partnership as of the date of dissolution
pursuant to Section 15.1, the amount of distributions received by each Partner
pursuant to Section 16.4, and the amount retained as reserves by the Liquidator
pursuant to Section 16.3.
SECTION 16.A.6 DEEMED DISTRIBUTION AND RECONTRIBUTION. Notwithstanding
any other provisions of this Article XVII, in the event the Partnership is
liquidated within the meaning of Treasury Regulation Section
1.704-1(b)(2)(ii)(g) but none of the events described under Section 15.1 has
occurred, the property of the Partnership shall not be liquidated, the
Partnership's liabilities shall not be paid or discharged, and the Partnership's
affairs shall not be wound up. Instead, (i) the Partnership shall be deemed to
have distributed its property in kind to the Partners, subject to all
Partnership liabilities, in accordance with their respective capital accounts,
and (ii) the General Partner shall contribute to the Partnership the negative
balance of its capital account. Immediately thereafter, the Partners shall be
deemed to have recontributed the Partnership property in kind to the
Partnership, which shall be deemed to have assumed and taken subject to all such
liabilities.
ARTICLE XVII.
VOTING BY LIMITED PARTNERS
Meetings of the Limited Partners may be called by the General Partner or
requested by the Limited Partners holding more than twenty percent (20%) of the
Interests (based on relative Sharing Ratios). The General Partner shall, within
fifteen (15) days after its receipt of any such request for a Partners' meeting,
give all Partners written notice of the time, place and purpose of such meeting
which shall be held not less than thirty (30) nor more than sixty (60) days
after the date of mailing of the notice and shall be at a reasonable time and
place. The call will state the nature of the business to be transacted, and no
other business will be considered at the meeting. Any action which may be taken
at a meeting of the Limited Partners may be taken without a meeting if a consent
in
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writing, setting forth the action so taken, shall be signed by Limited Partners
owning not less than the minimum percentage of Interests that would be necessary
to authorize or take such action at a meeting at which all Limited Partners were
present and voted.
ARTICLE XVIII.
NOTICES
To be effective, all notices and demands under this Agreement must be in
writing and must be given:
i) by depositing the same in the mail, postage prepaid, certified
or registered, return receipt requested,
ii) by prepaid telegram,
iii) by telefax, or
iv) by delivering such notices in person and receiving a signed
receipt therefor.
For purposes of notice, the addresses and telefax numbers of each Partner shall
be as set forth on the page on which it has executed this Agreement. Notices
mailed in accordance with the foregoing shall be deemed to have been given and
made five days following the date so mailed. Any Limited Partner or his assignee
may designate a different address or telefax number to which notices or demands
shall thereafter be directed by written notice given in the manner hereinabove
required and directed to the Partnership at its offices as hereinabove set
forth. The General Partner may designate a different address to which notices or
demands shall thereafter be directed by written notice to the Limited Partners
given in the manner hereinabove required.
ARTICLE XIX.
MISCELLANEOUS
SECTION 19.A.1 INDEPENDENT ACTIVITIES. The General Partner and each
Limited Partner, by entering into this Agreement, have not made themselves
subject to any restrictions or the activities in which they may engage, whether
the same are competitive with the Partnership or otherwise. Neither this
Agreement nor any activity undertaken pursuant hereto shall prevent any Partner
from engaging in such activities, or require any Partner to permit the
Partnership or any Partner to participate in any such activities, and as a
material part of the consideration for the execution of this Agreement by each
Partner, each Partner hereby waives, relinquishes and renounces any such right
or claim of participation. This Section 19.1 shall not be considered to restrict
the obligations the Partners or their Affiliates have to other Partners or their
affiliates pursuant to any other agreement or relationships to which any of them
is a party.
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SECTION 19.A.2 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties and supersedes any prior agreement or understandings
among them.
SECTION 19.A.3 GOVERNING LAW. This Agreement and the rights of the
parties hereunder shall be governed by and interpreted in accordance with the
laws of the state of Delaware.
SECTION 19.A.4 SUCCESSORS BOUND. Except as specifically provided
otherwise herein, this Agreement shall be binding upon and inure to the benefit
of the parties and their legal representatives, heirs, administrators,
executors, successors and assigns.
SECTION 19.A.5 CAPTIONS. Captions contained in this Agreement are
inserted only as a matter of convenience and in no way define, limit or extend
the scope or intent of this Agreement or any provision hereof.
SECTION 19.A.6 SEVERABILITY. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those to which it is held invalid, shall
not be affected thereby.
SECTION 19.A.7 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument.
SECTION 19.A.8 ADDITIONAL DOCUMENTS. Each party hereto agrees to
execute, with acknowledgment or affidavit, if required, any and all documents
and writings which may be necessary or expedient in connection with the creation
of the Partnership and the achievement of its purposes.
SECTION 19.A.9 SECTIONS, EXHIBITS, AND SCHEDULES. Except to the extent
the context specifically indicates otherwise, all references to articles and
sections refer to Articles and Sections of this Agreement, and all references to
exhibits and schedules refer to Exhibits and Schedules attached hereto, each of
which is made a part hereof for all purposes.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and in the year first above written.
THE GENERAL PARTNER: THE CURRENT LIMITED PARTNERS:
NOCO MANAGEMENT, LTD. A/S BONHEUR, a corporation
a limited liability company formed under the laws of the
formed under the laws of the Kingdom of Norway
state of Texas
By: /S/ XXXXX X. XXXXX By: /S/ FRIDTHJOV HAAVARDSSON
Printed Name: XXXXX X. XXXXX Printed Name: FRIDTHJOV HAAVARDSSON
Title: VICE PRESIDENT Title: DIRECTOR
Address: 0000 Xxxxxxxxxxx Xxx Address: Xxxx. Olsens Gate 2
Xxxxxxx, XX 00000 Xxxx 0, Xxxxxx
Telefax No: (000) 000-0000 Telefax No: 00-00-00-00-00
A/S XXXXXX XXXX, a corporation
formed under the laws of the
Kingdom of Norway
By: /S/ FRIDTHJOV HAAVARDSSON
Printed Name: FRIDTHJOV HAAVARDSON
Title: DIRECTOR
Address: Xxxx. Xxxxxx Xxxx 0
Xxxx 0, Xxxxxx
Telefax No: 00-00-00-00-00
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BREDFORD OIL & GAS L.P., a
Texas limited partnership
formed under the laws of the
state of Texas, U.S.A.
By: BREDFORD CO., INC., a Liberian
corporation which is its sole
general partner
By: /S/ XXXXX X. XXXXX
Printed Name: XXXXX X. XXXXX
Title: PRESIDENT
Address: 0000 Xxxxxxxxxxx Xxx
Xxxxxxx, XX 00000
Telefax No: (000) 000-0000
FOUR SEASONS VENTURE CAPITAL AB,
a corporation formed under the laws
of the Kingdom of Sweden
By: /S/ LARS XXXX XXXXXXXXXX
Printed Name: LARS XXXX XXXXXXXXXX
Title: CHAIRMAN
Address: Sveavagen
X-000 00 Xxxxxxxxx, Xxxxxx
Telefax No: 468-21-69-95
FOUR SEASONS VENTURE A/S, a
corporation formed under the laws
of the Kingdom of Norway
By: /S/ XXXXXX XXXXXXXX
Printed Name: XXXXXX XXXXXXXX
Title: MANAGAING DIRECTOR
Address: Vika Xxxxxx
Xxxxxxxxxxxxxx 00
0000 Xxxx 0, Xxxxxx
Telefax No: 00-00-00-00-00
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XXXX. XXXXX LIMITED, a corporation
formed under the laws of the United
Kingdom
By: /S/ XXXXXX XXXXXX
Printed Name: XXXXXX XXXXXX
Title:
Address: 00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX Xxxxxxx
Telefax No: 00-00-000-0000
LOKI A/S, a corporation formed under
the laws of the Kingdom of Norway
By: /S/ XXXX XXXXXX
Printed Name: XXXX XXXXXX
Title: PRESIDENT
Address: Xxxxxxxxxxxxx 0
Xxxx 0, Xxxxxx
Telefax No: 00-00-00-00-00
-00-
XXXXXXX XXXXXX A/S, a corporation
formed under the laws of the Kingdom
of Norway
By: /S/ XXXX XXXXXX
Printed Name: XXXX XXXXXX
Title: CHAIRMAN
Address: Xxxxxxxxxxxxx 0
Xxxx 0, Xxxxxx
Telefax No: 00-00-00-00-00
NEW ERA DEVELOPMENT
CORPORATION, a corporation
formed under the laws of Bermuda
By: /S/ XXXXXX X. XXXXXXXXX
Printed Name: XXXXXX X. XXXXXXXXX
Title: DIRECTOR
Address: 333 Visconde De Albuequerque
Leblon
Rio de Janeiro, Brazil
Telefax No:0000-000-0000
THE PREFERRED LIMITED PARTNERS:
A/S BORGA, a corporation formed under
the laws of the Kingdom of Norway
By: /S/FRIDTHJOV HAAVARDSSON
Printed Name: FRIDTHJOV HAAVARDSSON
Title: DIRECTOR
Address: Xxxx. Xxxxxx Xxxx 0
Xxxx 0, Xxxxxx
Telefax No: 00-00-00-00-00
-28-
A/S BORGA II, a corporation formed
under the laws of the Kingdom of Norway
By: /S/ FRIDTHJOV HAAVARDSSON
Printed Name: FRIDTHJOV HAAVARDSSON
Title:
Address: Xxxx. Xxxxxx Xxxx 0
Xxxx 0, Xxxxxx
Telefax No: 00-00-00-00-00
XXXX. XXXXX FINANCE LIMITED, a
corporation formed under the laws of
the United Kingdom
By: /S/ XXXXXX XXXXXX
Printed Name: XXXXXX XXXXXX
Title:
Address: Xxxxx Xxxxx Xxxx
Xxxxxxxx XX0 0XX
Xxxxxxx, Xxxxxxx
Telefax No: 444-73-29-22-12
-29-
EXHIBIT "A"
CURRENT LIMITED PARTNERS
A/S BONHEUR, a corporation
formed under the laws of the
Kingdom of Norway
A/S XXXXXX XXXX, a corporation
formed under the laws of the
Kingdom of Norway
BREDFORD OIL & GAS L.P., a Texas
limited partnership formed under the
laws of the state of Texas, U.S.A.
FOUR SEASONS VENTURE CAPITAL AB, a
corporation formed under the laws of the
Kingdom of Sweden
FOUR SEASONS VENTURE A/S, a
corporation formed under the laws of the
Kingdom of Norway
XXXX. XXXXX LIMITED, a corporation formed
under the laws of the United Kingdom
LOKI A/S, a corporation formed under
the laws of the Kingdom of Norway
MARELAN INVEST A/S, a corporation
formed under the laws of the Kingdom
of Norway
NEW ERA DEVELOPMENT CORPORATION,
a corporation formed under the laws
of Bermuda
-30-
EXHIBIT "B"
THE PREFERRED LIMITED PARTNERS
A/S BORGA, a corporation formed under
the laws of the Kingdom of Norway
A/S BORGA II, a corporation formed
under the laws of the Kingdom of Norway
XXXX. XXXXX FINANCE LIMITED, a
corporation formed under the laws of
the United Kingdom
-31-
EXHIBIT "C"
INDEBTEDNESS OF NOCO ENTERPRISES, L.P.
TO THE PREFERRED LIMITED PARTNERS
A/S BORGA $7,030,871.40
A/S BORGA II $7,030,871.40
XXXX. XXXXX FINANCE LIMITED $3,560,588.63
-32-
EXHIBIT "D"
NAME OF LIMITED PARTNERS PRE-CONVERSION SHARING RATIOS
A/S BONHEUR 13.4520%
A/S XXXXXX XXXX 13.4520%
BREDFORD OIL & GAS L.P. 7.8185%
FOUR SEASONS VENTURE CAPITAL AB 3.4295%
FOUR SEASONS VENTURE A/S 6.0610%
XXXX. XXXXX LIMITED 8.0465%
LOKI A/S 5.3675%
MARELAN INVEST A/S 5.3675%
NEW ERA DEVELOPMENT CORPORATION 13.0055%
A/S BORGA 2.0000%
A/S BORGA II 2.0000%
XXXX. XXXXX FINANCE LIMITED 1.0000%
NOCO MANAGEMENT, LTD 19.0000%
-33-
