EXECUTION COPY
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SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
SUBURBAN PROPANE, L.P.
TABLE OF CONTENTS
PAGE
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R E C I T A L S:............................................................13
ARTICLE I DEFINITIONS.....................................................2
1.1 DEFINITIONS...................................................2
1.2 CONSTRUCTION.................................................11
ARTICLE II ORGANIZATION...................................................11
2.1 FORMATION....................................................11
2.2 NAME.........................................................12
2.3 REGISTERED OFFICE; REGISTERED AGENT; PRINCIPAL OFFICE;
OTHER OFFICES...........................................12
2.4 PURPOSE AND BUSINESS.........................................13
2.5 POWERS.......................................................13
2.6 POWER OF ATTORNEY............................................13
2.7 TERM.........................................................14
2.8 TITLE TO PARTNERSHIP ASSETS..................................14
ARTICLE III RIGHTS OF THE LIMITED PARTNERS.................................15
3.1 LIMITATION OF LIABILITY......................................15
3.2 MANAGEMENT OF BUSINESS.......................................15
3.3 RIGHTS OF LIMITED PARTNERS RELATING TO THE PARTNERSHIP.......16
3.4 OUTSIDE ACTIVITIES OF THE LIMITED PARTNERS...................16
ARTICLE IV TRANSFER OF PARTNERSHIP INTERESTS..............................17
4.1 TRANSFER GENERALLY...........................................17
4.2 TRANSFER OF THE GENERAL PARTNER'S PARTNERSHIP INTEREST.......17
4.3 TRANSFER OF THE LIMITED PARTNERS'PARTNERSHIP INTERESTS.......17
4.4 RESTRICTIONS ON TRANSFERS....................................18
ARTICLE V CONTRIBUTIONS AND INITIAL TRANSFERS............................18
5.1 ORGANIZATIONAL CONTRIBUTIONS.................................18
5.2 CONTRIBUTIONS AND TRANSFERS ON THE INITIAL CLOSING DATE
AND THE CLOSING DATE....................................18
5.3 ADDITIONAL CAPITAL CONTRIBUTIONS.............................19
5.4 INTEREST AND WITHDRAWAL......................................19
5.5 CAPITAL ACCOUNTS.............................................19
5.6 LOANS FROM PARTNERS..........................................21
5.7 LIMITED PREEMPTIVE RIGHTS....................................22
5.8 FULLY PAID AND NON-ASSESSABLE NATURE OF LIMITED PARTNER
PARTNERSHIP INTERESTS...................................22
ARTICLE VI ALLOCATIONS AND DISTRIBUTIONS..................................22
6.1 ALLOCATIONS FOR CAPITAL ACCOUNT PURPOSES.....................22
6.2 ALLOCATIONS FOR TAX PURPOSES.................................25
6.3 SPECIAL DISTRIBUTION.........................................27
6.4 GENERAL DISTRIBUTIONS........................................27
ARTICLE VII MANAGEMENT AND OPERATION OF BUSINESS...........................28
7.1 MANAGEMENT...................................................28
7.2 THE BOARD OF SUPERVISORS; APPOINTMENT; MANNER OF ACTING......30
7.3 REMOVAL OF MEMBERS OF THE BOARD OF SUPERVISORS...............30
7.4 RESIGNATIONS OF MEMBERS OF THE BOARD OF SUPERVISORS..........31
7.5 VACANCIES ON THE BOARD OF SUPERVISORS........................31
7.6 MEETINGS; COMMITTEES; CHAIRMAN...............................31
7.7 OFFICERS.....................................................32
7.8 COMPENSATION.................................................34
7.9 RESTRICTIONS ON GENERAL PARTNER'S AND BOARD OF
SUPERVISORS' AUTHORITY..................................34
7.10 REIMBURSEMENT OF THE GENERAL PARTNER; EMPLOYEE BENEFIT
PLANS...................................................35
7.11 OUTSIDE ACTIVITIES OF THE GENERAL PARTNER....................36
7.12 LOANS FROM THE GENERAL PARTNER; CONTRACTS WITH
AFFILIATES; CERTAIN RESTRICTIONS ON THE GENERAL
PARTNER.................................................37
7.13 INDEMNIFICATION..............................................38
7.14 LIABILITY OF INDEMNITEES.....................................40
7.15 RESOLUTION OF CONFLICTS OF INTEREST..........................41
7.16 OTHER MATTERS CONCERNING THE GENERAL PARTNER AND THE
BOARD OF SUPERVISORS.........................................42
7.17 RELIANCE BY THIRD PARTIES....................................43
ARTICLE VIII BOOKS, RECORDS, ACCOUNTING AND REPORTS.........................44
8.1 RECORDS AND ACCOUNTING.......................................44
8.2 FISCAL YEAR..................................................44
ARTICLE IX TAX MATTERS....................................................44
9.1 TAX RETURNS AND INFORMATION..................................44
9.2 TAX ELECTIONS................................................45
9.3 TAX CONTROVERSIES............................................45
9.4 WITHHOLDING..................................................45
ARTICLE X ADMISSION OF PARTNERS..........................................45
10.1 INITIAL ADMISSION OF PARTNERS................................45
10.2 ADMISSION OF SUBSTITUTED LIMITED PARTNERS....................46
10.3 ADMISSION OF SUCCESSOR GENERAL PARTNER.......................46
10.4 ADMISSION OF ADDITIONAL LIMITED PARTNERS.....................46
10.5 AMENDMENT OF AGREEMENT AND CERTIFICATE OF
LIMITED PARTNERSHIP.....................................47
ARTICLE XI WITHDRAWAL OR REMOVAL OF PARTNERS..............................47
11.1 WITHDRAWAL OF THE GENERAL PARTNER............................47
11.2 REMOVAL OF THE GENERAL PARTNER...............................49
11.3 INTEREST OF DEPARTING PARTNER AND SUCCESSOR GENERAL
PARTNER; DELEGATION OF AUTHORITY TO THE BOARD OF
SUPERVISORS BY SUCCESSOR GENERAL PARTNER................49
11.4 WITHDRAWAL OF THE LIMITED PARTNER............................50
ARTICLE XII DISSOLUTION AND LIQUIDATION....................................50
12.1 DISSOLUTION..................................................50
12.2 CONTINUATION OF THE BUSINESS OF THE PARTNERSHIP
AFTER DISSOLUTION.......................................50
12.3 LIQUIDATOR...................................................51
12.4 LIQUIDATION..................................................52
12.5 CANCELLATION OF CERTIFICATE OF LIMITED PARTNERSHIP...........52
12.6 RETURN OF CAPITAL CONTRIBUTIONS..............................53
12.7 WAIVER OF PARTITION..........................................53
12.8 CAPITAL ACCOUNT RESTORATION..................................53
ARTICLE XIII AMENDMENT OF PARTNERSHIP AGREEMENT.............................53
13.1 AMENDMENT TO BE ADOPTED SOLELY BY THE BOARD OF SUPERVISORS...53
13.2 AMENDMENT PROCEDURES.........................................53
ARTICLE XIV MERGER.........................................................55
14.1 AUTHORITY....................................................55
14.2 PROCEDURE FOR MERGER OR CONSOLIDATION........................55
14.3 APPROVAL BY LIMITED PARTNERS OF MERGER OR CONSOLIDATION......56
14.4 CERTIFICATE OF MERGER........................................56
14.5 EFFECT OF MERGER.............................................56
ARTICLE XV GENERAL PROVISIONS.............................................57
15.1 ADDRESSES AND NOTICES........................................57
15.2 REFERENCES...................................................57
15.3 FURTHER ACTION...............................................57
15.4 BINDING EFFECT...............................................57
15.5 INTEGRATION..................................................58
15.6 CREDITORS....................................................58
15.7 WAIVER.......................................................58
15.8 COUNTERPARTS.................................................58
15.9 APPLICABLE LAW...............................................58
15.10 INVALIDITY OF PROVISIONS.....................................58
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
SUBURBAN PROPANE, L.P.
THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF SUBURBAN PROPANE, L.P. dated as of May 26, 1999, is entered into
by and among Suburban Energy Services Group LLC, a Delaware limited liability
company, as the General Partner, and Suburban Propane Partners, L.P., as the
Limited Partner, together with any other Persons who become Partners in the
Partnership or parties hereto as provided herein. In consideration of the
covenants, conditions and agreements contained herein, the parties hereto hereby
agree as follows:
R E C I T A L S:
WHEREAS, Suburban Propane GP, Inc., a Delaware corporation and
the initial general partner of the Partnership (the "Initial General Partner"),
and certain other parties organized the Partnership as a Delaware limited
partnership pursuant to an Amended and Restated Agreement of Limited Partnership
dated as of March 4, 1996 (the "Original Agreement"); and
WHEREAS, the Partnership, the MLP, the Initial General
Partner, Millennium and the General Partner have entered into that Amended and
Restated Recapitalization Agreement dated as of March 15, 1999 (the
"Recapitalization Agreement") providing for a recapitalization of the MLP (the
"Recapitalization") that includes, among other things, (i) the redemption by the
MLP of all of its outstanding Subordinated Units and APUs, (ii) certain
amendments to the Original Agreement and the Original Partnership Agreement,
(iii) the termination of the Distribution Support Agreement, (iv) the purchase
by the General Partner of the general partner interest in the MLP and the
Partnership and the Incentive Distribution Rights pursuant to that Purchase
Agreement dated as of November 27, 1998, as amended (the "Purchase Agreement"),
among the Initial General Partner, Millennium and the General Partner and (v)
the election of Suburban Energy Services Group LLC as the successor general
partner of the MLP and the Partnership; and
WHEREAS, the Recapitalization has been submitted to, and
approved by the requisite vote of, the Limited Partner and the limited partners
of the MLP; and
WHEREAS, the Board of Supervisors has the authority to adopt
certain amendments to this Agreement relating to the Recapitalization without
the approval of any Limited Partner or any limited partner of the MLP to
reflect, among other things, a change that, in the discretion of the Board of
Supervisors, does not adversely affect the Limited Partner in any material
respect.
NOW, THEREFORE, the Original Agreement is hereby amended and
restated in its entirety as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS.
The following definitions shall be for all purposes, unless
otherwise clearly indicated to the contrary, applied to the terms used in this
Agreement. Capitalized terms used herein but not otherwise defined shall have
the meanings assigned to such terms in the MLP Agreement.
"Additional Limited Partner" means a Person admitted to the
Partnership as a Limited Partner pursuant to Section 10.4 and who is shown as
such on the books and records of the Partnership.
"Adjusted Capital Account" means the Capital Account
maintained for each Partner as of the end of each fiscal year of the
Partnership, (a) increased by any amounts that such Partner is obligated to
restore under the standards set by Treasury Regulation Section
1.704-1(b)(2)(ii)(c) (or is deemed obligated to restore under Treasury
Regulation Sections 1.704-2(g) and 1.704-2(i)(5)) and (b) decreased by (i) the
amount of all losses and deductions that, as of the end of such fiscal year, are
reasonably expected to be allocated to such Partner in subsequent years under
Sections 704(e)(2) and 706(d) of the Code and Treasury Regulation Section
1.751-1(b)(2)(ii), and (ii) the amount of all distributions that, as of the end
of such fiscal year, are reasonably expected to be made to such Partner in
subsequent years in accordance with the terms of this Agreement or otherwise to
the extent they exceed offsetting increases to such Partner's Capital Account
that are reasonably expected to occur during (or prior to) the year in which
such distributions are reasonably expected to be made (other than increases as a
result of a minimum gain chargeback pursuant to Section 6.1(c)(i) or
6.1(c)(ii)). The foregoing definition of Adjusted Capital Account is intended to
comply with the provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d)
and shall be interpreted consistently therewith.
"Adjusted Property" means any property the Carrying Value of
which has been adjusted pursuant to Section 5.5(d)(i) or 5.5(d)(ii).
"Affiliate" means, with respect to any Person, any other
Person that directly or indirectly through one or more intermediaries controls,
is controlled by or is under common control with, the Person in question. As
used herein, the term "control" means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise.
"Agreed Allocation" means any allocation, other than a
Required Allocation, of an item of income, gain, loss or deduction pursuant to
the provisions of Section 6.1, including, without limitation, a Curative
Allocation (if appropriate to the context in which the term "Agreed Allocation"
is used).
"Agreed Value" of any Contributed Property means the fair
market value of such property or other consideration at the time of contribution
as determined by the Board of Supervisors using such reasonable method of
valuation as it may adopt. The Board of Supervisors shall, in its discretion,
use such method as it deems reasonable and appropriate to allocate the aggregate
Agreed Value of Contributed Properties contributed to the Partnership in a
single or integrated transaction among each separate property on a basis
proportional to the fair market value of each Contributed Property.
"Agreement" means this Second Amended and Restated Agreement
of Limited Partnership of Suburban Propane, L.P., as it may be amended,
supplemented or restated from time to time.
"Audit Committee" means a committee of the Board of
Supervisors of the Partnership composed of the same individuals who serve as the
audit committee of the MLP.
"Available Cash," means, with respect to any Quarter ending
prior to the Liquidation Date,
(a) the sum of (i) all cash and cash equivalents of the
Partnership Group on hand at the end of such Quarter, and (ii) all additional
cash and cash equivalents of the Partnership Group on hand on the date of
determination of Available Cash with respect to such Quarter resulting from
borrowings for working capital purposes, in each case subsequent to the end of
such Quarter, less
(b) the amount of any cash reserves that is necessary or
appropriate in the reasonable discretion of the Board of Supervisors to (i)
provide for the proper conduct of the business of the Partnership Group
(including reserves for future capital expenditures) subsequent to such Quarter,
(ii) comply with applicable law or any loan agreement, security agreement,
mortgage, debt instrument or other agreement or obligation to which any Group
Member is a party or by which it is bound or its assets are subject or (iii)
provide funds for distributions under Section 6.4 or 6.5 of the MLP Agreement in
respect of any one or more of the next four Quarters; provided, however, that
the Board of Supervisors may not establish cash reserves pursuant to (iii) above
if the effect of such reserves would be that the MLP is unable to distribute the
Minimum Quarterly Distribution on all Common Units with respect to such Quarter;
and, provided further, that disbursements made by a Group Member or cash
reserves established, increased or reduced after the end of such Quarter but on
or before the date of determination of Available Cash with respect to such
Quarter shall be deemed to have been made, established, increased or reduced,
for purposes of determining Available Cash, within such Quarter if the Board of
Supervisors so determines.
Notwithstanding the foregoing, "Available Cash" with respect
to the Quarter in which the Liquidation Date occurs and any subsequent Quarter
shall equal zero.
"Board of Supervisors" shall mean the board of supervisors of
the Partnership, composed of the five individuals who serve as members of the
MLP's board of supervisors, to whom the General Partner irrevocably delegates,
and in which is vested, pursuant to Section 7.1, and subject to Section 7.9, the
power to manage the business and activities of the Partnership. The Board of
Supervisors shall constitute a committee with the meaning of Section
17-303(b)(7) of the Delaware Act.
"Book-Tax Disparity" means with respect to any item of
Contributed Property or Adjusted Property, as of the date of any determination,
the difference between the Carrying Value of such Contributed Property or
Adjusted Property and the adjusted basis thereof for federal income tax purposes
as of such date. A Partner's share of the Partnership's Book-Tax Disparities in
all of its Contributed Property and Adjusted Property will be reflected by the
difference between such Partner's Capital Account balance as maintained pursuant
to Section 5.5 and the hypothetical balance of such Partner's Capital Account
computed as if it had been maintained strictly in accordance with federal income
tax accounting principles.
"Business Day" means Monday through Friday of each week,
except that a legal holiday recognized as such by the government of the United
States of America or the states of New York or New Jersey shall not be regarded
as a Business Day.
"Capital Account" means the capital account maintained for a
Partner pursuant to Section 5.5.
"Capital Contribution" means any cash, cash equivalents or the
Net Agreed Value of Contributed Property that a Partner contributes or has
contributed to the Partnership pursuant to this Agreement (or the Original
Agreement) or the Contribution and Conveyance Agreement.
"Capitalized Lease Obligations" means obligations to pay rent
or other amounts under any lease of (or other arrangement conveying the right to
use) real and/or personal property, which obligations are accounted for as a
capital lease on a balance sheet under U.S. GAAP; for the purpose hereof the
amount of such obligations shall be the capitalized amount reflected on such
balance sheet.
"Carrying Value" means (a) with respect to a Contributed
Property, the Agreed Value of such property reduced (but not below zero) by all
depreciation, amortization and cost recovery deductions charged to the Partners'
Capital Accounts in respect of such Contributed Property, and (b) with respect
to any other Partnership property, the adjusted basis of such property for
federal income tax purposes, all as of the time of determination. The Carrying
Value of any property shall be adjusted from time to time in accordance with
Sections 5.5(d)(i) and 5.5(d)(ii) and to reflect changes, additions or other
adjustments to the Carrying Value for dispositions and acquisitions of
Partnership properties, as deemed appropriate by the Board of Supervisors.
"Cause" means a court of competent jurisdiction has entered a
final, non-appealable judgment finding a Person liable for actual fraud, gross
negligence or willful or wanton misconduct in its capacity as general partner of
the Partnership or as a member of the Board of Supervisors, as the case may be.
"Certificate of Limited Partnership" means the Certificate of
Limited Partnership of the Partnership filed with the Secretary of State of the
State of Delaware as referenced in Section 2.1, as such Certificate of Limited
Partnership may be amended, supplemented or restated from time to time.
"Closing" has the meaning assigned to such term in the
Recapitalization Agreement.
"Closing Date" means the date on which the Closing occurs.
"Code" means the Internal Revenue Code of 1986, as amended and
in effect from time to time. Any reference herein to a specific section or
sections of the Code shall be deemed to include a reference to any corresponding
provision of future law.
"Commission" means the United States Securities and Exchange
Commission.
"Contributed Property" means each property or other asset, in
such form as may be permitted by the Delaware Act, but excluding cash,
contributed to the Partnership. Once the Carrying Value of a Contributed
Property is adjusted pursuant to Section 5.5(d), such property shall no longer
constitute a Contributed Property, but shall be deemed an Adjusted Property.
"Contribution and Conveyance Agreement" means that certain
Contribution, Conveyance and Assumption Agreement, dated as of March 4, 1996,
among the Initial General Partner, the MLP, the Partnership and certain other
parties, together with the additional conveyance documents and instruments
contemplated or referenced thereunder.
"Curative Allocation" means any allocation of an item of
income, gain, deduction, loss or credit pursuant to the provisions of Section
6.1(c)(ix).
"Delaware Act" means the Delaware Revised Uniform Limited
Partnership Act, 6 Del C. ss.17-101, ET SEQ., as amended, supplemented or
restated from time to time, and any successor to such statute.
"Departing Partner" means a former General Partner from and
after the effective date of any withdrawal or removal of such former General
Partner pursuant to Section 11.1 or 11.2, including the Initial General Partner
from and after the Closing..
"Economic Risk of Loss" has the meaning set forth in Treasury
Regulation Section 1.752-2(a).
"Event of Withdrawal" has the meaning assigned to such term in
Section 11.1(a).
"General Partner" means Suburban Energy Services Group LLC and
its successors as general partner of the Partnership.
"Group Member" means a member of the Partnership Group.
"Indebtedness," as used in Section 7.9(b), means, as applied
to any Person, without duplication, any indebtedness, exclusive of deferred
taxes, (i) in respect of borrowed money (whether or not the recourse of the
lender is to the whole of the assets of such Person or only to a portion
thereof); (ii) evidenced by bonds, notes, debentures or similar instruments or
letters of credit in support of bonds, notes, debentures or similar instruments;
(iii) representing the balance deferred and unpaid of the purchase price of any
property, if and to the extent such indebtedness would appear as a liability on
a balance sheet of such Person prepared in accordance with U.S. GAAP (but
excluding trade accounts payable arising in the ordinary course of business that
are not overdue by more than 90 days or are being contested by such Person in
good faith); (iv) any Capitalized Lease Obligations of such Person; and (v)
Indebtedness of others guaranteed by such Person, including, without limitation,
every obligation of such Person (A) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or to purchase (or to
advance or supply funds for the purchase of) any security for the payment of
such Indebtedness, or (B) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness.
"Indemnitee" means (a) the members of the Board of Supervisors
or the members of the board of supervisors of the MLP or any other Group Member,
(b) the General Partner, any Departing Partner and any Person who is or was an
Affiliate of the General Partner or any Departing Partner, (c) any Person who is
or was a member, partner, director, officer, employee, agent or trustee of the
MLP, any Group Member, the General Partner or any Departing Partner or any
Affiliate or the MLP, any Group Member, the General Partner or any Departing
Partner and (e) any Person who is or was serving at the request of the Board of
Supervisors, the General Partner or any Departing Partner or any Affiliate of
the General Partner or any Departing Partner as a member, partner, director,
officer, employee, partner, agent, fiduciary or trustee of another Person, in
each case, acting in such capacity; PROVIDED, that a Person shall not be an
Indemnitee by reason of providing, on a fee-for-services basis, trustee,
fiduciary or custodial services.
"Initial Closing Date" means March 5, 1996.
"Initial General Partner" has the meaning assigned to such
term in the Recitals to this Agreement.
"Initial Offering" means the initial offering and sale of
Common Units to the public on March 5, 1996, as described in the Initial
Registration Statement.
"Initial Registration Statement" means the Registration
Statement on Form S-1 (Registration No. 33-80605) filed by the MLP with the
Commission under the Securities Act to register the offering and sale of the
Common Units in the Initial Offering as declared effective by the Commission and
as amended or supplemented from time to time.
"Limited Partner" means, unless the context otherwise
requires, the MLP, each Substituted Limited Partner, each Additional Limited
Partner and any Departing Partner upon the change of its status from General
Partner to Limited Partner pursuant to Section 11.3.
"Liquidation Date" means (a) in the case of an event giving
rise to the dissolution of the Partnership of the type described in clauses (a)
and (b) of the first sentence of Section 12.2, the date on which the applicable
time period during which the Partners have the right to elect to reconstitute
the Partnership and continue its business has expired without such an election
being made, and (b) in the case of any other event giving rise to the
dissolution of the Partnership, the date on which such event occurs.
"Liquidator" means one or more Persons selected by the Board
of Supervisors to perform the functions described in Section 12.3.
"Merger Agreement" has the meaning assigned to such term in
Section 14.1.
"Millennium" means Millennium Petrochemicals Inc., a Virginia
corporation and the sole stockholder of the Initial General Partner.
"MLP" means Suburban Propane Partners, L.P., a Delaware
limited partnership.
"MLP Agreement" means the Second Amended and Restated
Agreement of Limited Partnership of the MLP, as it may be amended, supplemented
or restated from time to time.
"Net Agreed Value" means, (a) in the case of any Contributed
Property, the Agreed Value of such property reduced by any liabilities either
assumed by the Partnership upon such contribution or to which such property is
subject when contributed, and (b) in the case of any property distributed to a
Partner by the Partnership, the Partnership's Carrying Value of such property
(as adjusted pursuant to Section 5.5(d)(ii)) at the time such property is
distributed, reduced by any indebtedness either assumed by such Partner upon
such distribution or to which such property is subject at the time of
distribution, in either case, as determined under Section 752 of the Code.
"Net Income" means, for any taxable year, the excess, if any,
of the Partnership's items of income and gain (other than those items taken into
account in the computation of Net Termination Gain or Net Termination Loss) for
such taxable year over the Partnership's items of loss and deduction (other than
those items taken into account in the computation of Net Termination Gain or Net
Termination Loss) for such taxable year. The items included in the calculation
of Net Income shall be determined in accordance with Section 5.5(b) and shall
not include any items specially allocated under Section 6.1(c).
"Net Loss" means, for any taxable year, the excess, if any, of
the Partnership's items of loss and deduction (other than those items taken into
account in the computation of Net Termination Gain or Net Termination Loss) for
such taxable year over the Partnership's items of income and gain (other than
those items taken into account in the computation of Net Termination Gain or Net
Termination Loss) for such taxable year. The items included in the calculation
of Net Loss shall be determined in accordance with Section 5.5(b) and shall not
include any items specially allocated under Section 6.1(c).
"Net Termination Gain" means, for any taxable year, the sum,
if positive, of all items of income, gain, loss or deduction recognized by the
Partnership after the Liquidation Date. The items included in the determination
of Net Termination Gain shall be determined in accordance with Section 5.5(b)
and shall not include any items of income, gain or loss specially allocated
under Section 6.1(c).
"Net Termination Loss" means, for any taxable year, the sum,
if negative, of all items of income, gain, loss or deduction recognized by the
Partnership after the Liquidation Date. The items included in the determination
of Net Termination Loss shall be determined in accordance with Section 5.5(b)
and shall not include any items of income, gain or loss specially allocated
under Section 6.1(c).
"Nonrecourse Built-in Gain" means, with respect to any
Contributed Properties or Adjusted Properties that are subject to a mortgage or
pledge securing a Nonrecourse Liability, the amount of any taxable gain that
would be allocated to the Partners pursuant to Sections 6.2(b)(i)(A),
6.2(b)(ii)(A) and 6.2(b)(iii) if such properties were disposed of in a taxable
transaction in full satisfaction of such liabilities and for no other
consideration.
"Nonrecourse Deductions" means any and all items of loss,
deduction or expenditures (including, without limitation, any expenditure
described in Section 705(a)(2)(B) of the Code) that, in accordance with the
principles of Treasury Regulation Section 1.704-2(b), are attributable to a
Nonrecourse Liability.
"Nonrecourse Liability" has the meaning set forth in Treasury
Regulation Section 1.752-1(a)(2).
"OLP Subsidiary" means a Subsidiary of the Partnership.
"Officers" means the Chairman of the Board of Supervisors
(unless the Board of Supervisors provides otherwise), the Vice Chairman of the
Board of Supervisors (unless the Board of Supervisors provides otherwise), the
President, any Vice Presidents, the Secretary, the Treasurer, any Assistant
Secretaries or Assistant Treasurers and any other officers of the Partnership
appointed by the Board of Supervisors pursuant to Section 7.7.
"Opinion of Counsel" means a written opinion of counsel (who
may be regular counsel to the Partnership or the General Partner or any of their
Affiliates) acceptable to the Board of Supervisors in its reasonable discretion.
"Original Agreement" has the meaning assigned to such term in
the Recitals to this Agreement.
"Original Partnership Agreement" means the Amended and
Restated Agreement of Limited Partnership of the MLP dated as of March 4, 1996.
"Partner Nonrecourse Debt" has the meaning set forth in
Treasury Regulation Section 1.704-2(b)(4).
"Partner Nonrecourse Debt Minimum Gain" has the meaning set
forth in Treasury Regulation Section 1.704-2(i)(2).
"Partner Nonrecourse Deductions" means any and all items of
loss, deduction or expenditure (including, without limitation, any expenditure
described in Section 705(a)(2)(B) of the Code) that, in accordance with the
principles of Treasury Regulation Section 1.704-2(i), are attributable to a
Partner Nonrecourse Debt.
"Partners" means the General Partner and the Limited Partners.
"Partnership" means Suburban Propane, L.P., a Delaware limited
partnership, and any successors thereto.
"Partnership Group" means the Partnership and the OLP
Subsidiaries, treated as a single consolidated entity.
"Partnership Interest" means the interest of a Partner in the
Partnership.
"Partnership Minimum Gain" means that amount determined in
accordance with the principles of Treasury Regulation Section 1.704-2(d).
"Percentage Interest" means (a) as to the General Partner (in
its capacity as General Partner without reference to any limited partner
interests held by it), 1.0101%, and (b) as to the Limited Partner, 98.9899%.
"Person" means an individual or a corporation, limited
liability company, partnership, limited liability partnership, joint venture,
trust, unincorporated organization, association, government agency or political
subdivision thereof or other entity.
"Purchase Agreement" has the meaning assigned to such term in
the Recitals to this Agreement.
"QCC" means Quantum Chemical Corporation, a Virginia
corporation.
"Quarter" means, unless the context requires otherwise, a
fiscal quarter of the Partnership.
"Recapitalization" has the meaning assigned to such term in
the Recitals to this Agreement.
"Recapitalization Agreement" has the meaning assigned to such
term in the Recitals to this Agreement.
"Recapture Income" means any gain recognized by the
Partnership (computed without regard to any adjustment required by Section 734
or 743 of the Code) upon the disposition of any property or asset of the
Partnership, which gain is characterized as ordinary income because it
represents the recapture of deductions previously taken with respect to such
property or asset.
"Required Allocations" means (a) any limitation imposed on any
allocation of Net Losses or Net Termination Losses under Section 6.1(b) and (b)
any allocation of an item of income, gain, loss or deduction pursuant to Section
6.1(c)(i), 6.1(c)(ii), 6.1(c)(iii), 6.1(c)(vi) or 6.1(c)(viii).
"Residual Gain" or "Residual Loss" means any item of gain or
loss, as the case may be, of the Partnership recognized for federal income tax
purposes resulting from a sale, exchange or other disposition of a Contributed
Property or Adjusted Property, to the extent such item of gain or loss is not
allocated pursuant to Section 6.2(b)(i)(A) or 6.2(b)(ii)(A), respectively, to
eliminate Book-Tax Disparities.
"Securities Act" means the Securities Act of 1933, as amended,
supplemented or restated from time to time and any successor to such statute.
"Special Approval" means approval by a majority of the members
of the Audit Committee.
"Subsidiary" means, with respect to any Person, (a) a
corporation of which more than 50% of the voting power of shares entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors or other governing body of such corporation is owned, directly or
indirectly, at the date of determination, by such Person, by one or more
Subsidiaries of such Person or a combination thereof, (b) a partnership (whether
general or limited) in which such Person or a Subsidiary of such Person is, at
the date of determination, a general or limited partner of such partnership, but
only if more than 50% of the partnership interests of such partnership
(considering all of the partnership interests of the partnership as a single
class) is owned, directly or indirectly, at the date of determination, by such
Person, by one or more Subsidiaries of such Person or a combination thereof, or
(c) any other Person (other than a corporation or a partnership) in which such
Person, one or more Subsidiaries of such Person, or a combination thereof,
directly or indirectly, at the date of determination, has (i) at least a
majority ownership interest or (ii) the power to elect or direct the election of
a majority of the directors or other governing body of such Person.
"Substituted Limited Partner" means a Person who is admitted
as a Limited Partner to the Partnership pursuant to Section 10.2 in place of and
with all the rights of a Limited Partner and who is shown as a Limited Partner
on the books and records of the Partnership.
"Surviving Business Entity" has the meaning assigned to such
term in Section 14.2(b).
"Transfer" has the meaning assigned to such term in Section
4.1(a).
"Underwriting Agreement" means the Underwriting Agreement
dated February 29, 1996, among the MLP, the underwriters named therein and
certain other parties, providing for the purchase of the Common Units by the
underwriters named therein.
"Unrealized Gain" attributable to any item of Partnership
property means, as of any date of determination, the excess, if any, of (a) the
fair market value of such property as of such date (as determined under Section
5.5(d)) over (b) the Carrying Value of such property as of such date (prior to
any adjustment to be made pursuant to Section 5.5(d) as of such date).
"Unrealized Loss" attributable to any item of Partnership
property means, as of any date of determination, the excess, if any, of (a) the
Carrying Value of such property as of such date (prior to any adjustment to be
made pursuant to Section 5.5(d) as of such date) over (b) the fair market value
of such property as of such date (as determined under Section 5.5(d)).
"U.S. GAAP" means United States Generally Accepted Accounting
Principles consistently applied.
"Withdrawal Opinion of Counsel" has the meaning assigned to
such term in Section 11.1(b).
1.2 CONSTRUCTION.
Unless the context requires otherwise: (a) any pronoun used in
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns, pronouns and verbs shall include the
plural and vice versa; (b) references to Articles and Sections refer to Articles
and Sections of this Agreement; and (c) "include" or "includes" means includes,
without limitation, and "including" means including, without limitation.
ARTICLE II
ORGANIZATION
2.1 FORMATION.
The Initial General Partner and the MLP previously formed the
Partnership as a limited partnership upon the filing on December 19, 1995 of the
Certificate of Limited Partnership with the Secretary of State of the State of
Delaware pursuant to the provisions of the Delaware Act. The General Partner and
the MLP hereby amend and restate the Original Agreement in its entirety to
continue the Partnership as a limited partnership pursuant to the provisions of
the Delaware Act and to set forth the rights and obligations of the Partners and
certain matters related thereto. This amendment and restatement shall become
effective on the date of this Agreement. Except as expressly provided to the
contrary in this Agreement, the rights and obligations of the Partners and the
administration, dissolution and termination of the Partnership shall be governed
by the Delaware Act. All Partnership Interests shall constitute personal
property of the owner thereof for all purposes.
The General Partner has caused the Certificate of Limited
Partnership to be filed with the Secretary of State of the State of Delaware as
required by the Delaware Act and shall use all reasonable efforts to cause to be
filed such other certificates or documents as may be determined by the Board of
Supervisors to be reasonable and necessary or appropriate for the formation,
continuation, qualification and operation of a limited partnership (or a
partnership in which the limited partners have limited liability) in the State
of Delaware or any other state in which the Partnership may elect to do business
or own property, including an amendment to reflect the admission of the General
Partner as a successor to the Initial General Partner. To the extent that such
action is determined by the Board of Supervisors to be reasonable and necessary
or appropriate, the General Partner shall file amendments to and restatements of
the Certificate of Limited Partnership and do all things to maintain the
Partnership as a limited partnership (or a partnership in which the limited
partners have limited liability) under the laws of the State of Delaware or of
any other state in which the Partnership may elect to do business or own
property, including in connection with the Recapitalization and the transactions
contemplated thereby. Subject to the provisions of Section 3.4(a), the
Partnership shall not be required, before or after filing, to deliver or mail a
copy of the Certificate of Limited Partnership, any qualification document or
any amendment thereto to any Limited Partner.
2.2 NAME.
The name of the Partnership shall be "Suburban Propane, L.P."
The Partnership's business may be conducted under any other name or names deemed
necessary or appropriate by the Board of Supervisors, including, if consented to
by the General Partner in its sole discretion, the name of the General Partner.
The words "Limited Partnership," "L.P.," "Ltd." or similar words or letters
shall be included in the Partnership's name where necessary for the purpose of
complying with the laws of any jurisdiction that so requires. The Board of
Supervisors in its discretion may change the name of the Partnership at any time
and from time to time and shall notify the Limited Partners of such change in
the next regular communication to the Limited Partners.
2.3 REGISTERED OFFICE; REGISTERED AGENT; PRINCIPAL OFFICE; OTHER
OFFICES.
Unless and until changed by the Board of Supervisors, the
registered office of the Partnership in the State of Delaware shall be located
at 0000 Xxxxxx Xxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, and the
registered agent for service of process on the Partnership in the State of
Delaware at such registered office shall be CT Corporation System. The principal
office of the Partnership shall be located at Xxx Xxxxxxxx Xxxxx, 000 Xxxxx 00
Xxxx, Xxxxxxxx, Xxx Xxxxxx 00000-0000 or such other place as the Board of
Supervisors may from time to time designate by notice to the Limited Partner.
The Partnership may maintain offices at such other place or places within or
outside the State of Delaware as the Board of Supervisors deems necessary or
appropriate. The address of the General Partner shall be Xxx Xxxxxxxx Xxxxx, 000
Xxxxx 00 Xxxx, Xxxxxxxx, Xxx Xxxxxx 00000-0000 or such other place as the
General Partner may from time to time designate by notice to the Limited
Partners.
2.4 PURPOSE AND BUSINESS.
The purpose and nature of the business to be conducted by the
Partnership shall be to (a) acquire, manage and operate the assets held by the
Partnership on the Initial Closing Date and any similar assets or properties,
(b) engage directly in, or enter into or form any corporation, partnership,
joint venture, limited liability company or other arrangement to engage
indirectly in, any business activity that is approved by the Board of
Supervisors and which may lawfully be conducted by a limited partnership
organized pursuant to the Delaware Act and, in connection therewith, to exercise
all of the rights and powers conferred upon the Partnership pursuant to the
agreements relating to such business activity and (c) do anything necessary or
appropriate to the foregoing, including the making of capital contributions or
loans to any Group Member, the MLP or any Subsidiary of the MLP. The Board of
Supervisors has no obligation or duty to the Partnership or the Limited Partners
to propose or approve, and in its discretion may decline to propose or approve,
the conduct by the Partnership of any business.
2.5 POWERS.
The Partnership shall be empowered to do any and all acts and
things necessary, appropriate, proper, advisable, incidental to or convenient
for the furtherance and accomplishment of the purposes and business described in
Section 2.4 and for the protection and benefit of the Partnership.
2.6 POWER OF ATTORNEY.
(a) The Limited Partners hereby constitute and appoint the
Vice Chairman and President of the Partnership and, if a Liquidator shall have
been selected pursuant to Section 12.3, the Liquidator, severally (and any
successor to the Liquidator by merger, transfer, assignment, election or
otherwise) and each of their authorized officers and attorneys-in-fact, as the
case may be, with full power of substitution, as his true and lawful agent and
attorney-in-fact, with full power and authority in his name, place and xxxxx,
to:
(i) execute, swear to, acknowledge, deliver, file and record
in the appropriate public offices (A) all certificates, documents and
other instruments (including this Agreement and the Certificate of
Limited Partnership and all amendments or restatements thereof) that
the Board of Supervisors or the Liquidator deems necessary or
appropriate to form, qualify or continue the existence or qualification
of the Partnership as a limited partnership (or a partnership in which
the limited partners have limited liability) in the State of Delaware
and in all other jurisdictions in which the Partnership may conduct
business or own property; (B) all certificates, documents and other
instruments that the Board of Supervisors or the Liquidator deems
necessary or appropriate to reflect, in accordance with its terms, any
amendment, change, modification or restatement of this Agreement; (C)
all certificates, documents and other instruments (including
conveyances and a certificate of cancellation) that the Board of
Supervisors or the Liquidator deems necessary or appropriate to reflect
the dissolution and liquidation of the Partnership pursuant to the
terms of this Agreement; (D) all certificates, documents and other
instruments relating to the admission, withdrawal, removal or
substitution of any Partner pursuant to, or other events described in,
Article IV, X, XI or XII; (E) all certificates, documents and other
instruments relating to the determination of the rights, preferences
and privileges of any class or series of Partnership Interests; and (F)
all certificates, documents and other instruments (including agreements
and a certificate of merger) relating to a merger or consolidation of
the Partnership pursuant to Article XIV; and
(ii) execute, swear to, acknowledge, deliver, file and record
all ballots, consents, approvals, waivers, certificates, documents and
other instruments necessary or appropriate, in the discretion of the
Board of Supervisors or the Liquidator, to make, evidence, give,
confirm or ratify any vote, consent, approval, agreement or other
action that is made or given by the Partners hereunder or is consistent
with the terms of this Agreement or is necessary or appropriate, in the
discretion of the Board of Supervisors or the Liquidator, to effectuate
the terms or intent of this Agreement; PROVIDED, that when the approval
of the Limited Partners is required by any provision of this Agreement,
the Vice Chairman and President of the Partnership and the Liquidator
may exercise the power of attorney made in this Section 2.6(a)(ii) only
after the necessary consent or approval of the Limited Partners is
obtained.
Nothing contained in this Section 2.6(a) shall be construed as authorizing the
Board of Supervisors to amend this Agreement except in accordance with Article
XIII or as may be otherwise expressly provided for in this Agreement.
(b) The foregoing power of attorney is hereby declared to be
irrevocable and a power coupled with an interest, and it shall survive and, to
the maximum extent permitted by law, not be affected by the subsequent death,
incompetency, disability, incapacity, dissolution, bankruptcy or termination of
the Limited Partners and the transfer of all or any portion of the Limited
Partner's Partnership Interest and shall extend to the Limited Partner's heirs,
successors, assigns and personal representatives. The Limited Partners hereby
agree to be bound by any representation made by the Vice Chairman or President
of the Partnership or the Liquidator acting in good faith pursuant to such power
of attorney; and the Limited Partners hereby waive, to the maximum extent
permitted by law, any and all defenses that may be available to contest, negate
or disaffirm the action of the Vice Chairman or President of the Partnership or
the Liquidator taken in good faith under such power of attorney. The Limited
Partners shall execute and deliver to the Vice Chairman or President of the
Partnership or the Liquidator, within 15 days after receipt of the request
therefor, such further designation, powers of attorney and other instruments as
the Vice Chairman or President of the Partnership or the Liquidator deems
necessary to effectuate this Agreement and the purposes of the Partnership.
2.7 TERM.
The Partnership commenced upon the filing of the Certificate
of Limited Partnership in accordance with the Delaware Act and shall continue in
existence until the close of Partnership business on September 30, 2085, or
until the earlier termination of the Partnership in accordance with the
provisions of Article XII.
2.8 TITLE TO PARTNERSHIP ASSETS.
Title to Partnership assets, whether real, personal or mixed
and whether tangible or intangible, shall be deemed to be owned by the
Partnership as an entity, and no Partner individually or collectively, shall
have any ownership interest in such Partnership assets or any portion thereof.
Title to any or all of the Partnership assets may be held in the name of the
Partnership, the General Partner or one or more nominees, as the Board of
Supervisors may determine. The General Partner hereby declares and warrants that
any Partnership assets for which record title is held in the name of the General
Partner or one or more nominees shall be held by the General Partner or nominee
for the use and benefit of the Partnership in accordance with the provisions of
this Agreement; PROVIDED, HOWEVER, that the General Partner shall use reasonable
efforts to cause record title to such assets (other than those assets in respect
of which the Board of Supervisors determines that the expense and difficulty of
conveyancing makes transfer of record title to the Partnership impracticable) to
be vested in the Partnership as soon as reasonably practicable; PROVIDED,
FURTHER, that, prior to the withdrawal or removal of the General Partner or as
soon thereafter as practicable, the General Partner shall use reasonable efforts
to effect the transfer of record title to the Partnership and, prior to any such
transfer, will provide for the use of such assets in a manner satisfactory to
the Board of Supervisors. All Partnership assets shall be recorded as the
property of the Partnership in its books and records, irrespective of the name
in which record title to such Partnership assets is held.
ARTICLE III
RIGHTS OF THE LIMITED PARTNERS
3.1 LIMITATION OF LIABILITY.
The Limited Partners shall have no liability under this
Agreement except as expressly provided in this Agreement or the Delaware Act.
3.2 MANAGEMENT OF BUSINESS.
No Limited Partner (other than the General Partner, or any of
its Affiliates or any member, officer, director, employee, partner, agent or
trustee of the General Partner or any of its Affiliates, or any officer, member
of the board of supervisors or directors, employee or agent of a Group Member,
in its capacity as such, if such Person shall also be a Limited Partner) shall
participate in the operation, management or control (within the meaning of
Section 17-303(a) of the Delaware Act) of the Partnership's business, transact
any business in the Partnership's name or have the power to sign documents for
or otherwise bind the Partnership. Any action taken by any Affiliate of the
General Partner or any member, officer, director, employee, partner, agent or
trustee of the General Partner or any of its Affiliates, or any officer, member
of the board of supervisors or directors, member, partner, employee or agent of
a Group Member, the MLP or any Subsidiary of the MLP, in its capacity as such,
shall not be deemed to be participation in the control of the business of the
Partnership by a limited partner of the Partnership (within the meaning of
Section 17-303(a) of the Delaware Act) and shall not affect, impair or eliminate
the limitations on the liability of the Limited Partners under this Agreement.
3.3 RIGHTS OF LIMITED PARTNERS RELATING TO THE PARTNERSHIP.
(a) In addition to other rights provided by this Agreement or
by applicable law, and except as limited by Section 3.3(b), each of the Limited
Partners shall have the right, for a purpose reasonably related to such Limited
Partner's interest as a limited partner in the Partnership, upon reasonable
demand and at the Limited Partner's own expense:
(i) to obtain true and full information regarding the status
of the business and financial condition of the Partnership;
(ii) promptly after becoming available, to obtain a copy of
the Partnership's federal, state and local tax returns for each year;
(iii) to have furnished to it, upon notification to the
Partnership, a current list of the name and last known business,
residence or mailing address of each Partner;
(iv) to have furnished to it, upon notification to the
Partnership, a copy of this Agreement and the Certificate of Limited
Partnership and all amendments thereto, together with a copy of the
executed copies of all powers of attorney pursuant to which this
Agreement, the Certificate of Limited Partnership and all amendments
thereto have been executed;
(v) to obtain true and full information regarding the amount
of cash and a description and statement of the Net Agreed Value of any
other Capital Contribution by each Partner and which each Partner has
agreed to contribute in the future, and the date on which each became a
Partner; and
(vi) to obtain such other information regarding the affairs
of the Partnership as is just and reasonable.
(b) The Board of Supervisors may keep confidential from the
Limited Partners, for such period of time as the Board of Supervisors deems
reasonable, (i) any information that the Board of Supervisors reasonably
believes to be in the nature of trade secrets or (ii) other information the
disclosure of which the Board of Supervisors in good faith believes (A) is not
in the best interests of the Partnership Group, (B) could damage the Partnership
Group or (C) that any Group Member is required by law or by agreements with
third parties to keep confidential (other than agreements with Affiliates the
primary purpose of which is to circumvent the obligations set forth in this
Section 3.3).
3.4 OUTSIDE ACTIVITIES OF THE LIMITED PARTNERS.
Subject to the provisions of Section 7.11, which shall
continue to be applicable to the Persons referred to therein, regardless of
whether such Person shall also be a Limited Partner, any Limited Partner shall
be entitled to and may have business interests and engage in business activities
in addition to those relating to the Partnership, including business interests
and activities in direct competition with the Partnership Group.
ARTICLE IV
TRANSFER OF PARTNERSHIP INTERESTS
4.1 TRANSFER GENERALLY.
(a) The term "transfer," when used in this Agreement with
respect to a Partnership Interest, shall be deemed to refer to a transaction by
which a Partner assigns its Partnership Interest to another Person, and includes
a sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange
or any other disposition by law or otherwise, in whole or in part.
(b) No Partnership Interest shall be transferred, in whole or
in part, except in accordance with the terms and conditions set forth in this
Article IV. Any transfer or purported transfer of a Partnership Interest not
made in accordance with this Article IV shall be null and void.
(c) Nothing contained in this Agreement shall be construed to
prevent a disposition by any securityholder of the General Partner of any or all
of the issued and outstanding equity interests in the General Partner.
4.2 TRANSFER OF THE GENERAL PARTNER'S PARTNERSHIP INTEREST.
If the General Partner transfers its partnership interest as
the general partner of the MLP to any Person in accordance with the provisions
of the MLP Agreement, the General Partner shall contemporaneously therewith
transfer all, but not less than all, of its Partnership Interest as the general
partner of the Partnership to such Person, and the Limited Partner hereby
expressly consents to such transfer. Except as set forth in the immediately
preceding sentence and except in connection with any pledge of the General
Partner's Partnership Interest as the general partner of the Partnership solely
for the purpose of securing, directly or indirectly, indebtedness of the General
Partner in connection with the acquisition loan incurred by the General Partner
to purchase the general partner interests in the Partnership at the Closing and
any related foreclosure on or sale thereafter of the General Partner's
Partnership Interest, the General Partner may not transfer all or any part of
its Partnership Interest as the general partner of the Partnership. Any
transferee of the Partnership Interests of the General Partner pursuant to this
Section 4.2 shall be deemed to be a successor to the General Partner for
purposes of this Agreement.
4.3 TRANSFER OF THE LIMITED PARTNERS' PARTNERSHIP INTERESTS.
Any Limited Partner may transfer all, but not less than all,
of its Partnership Interest as a limited partner of the Partnership in
connection with the merger, consolidation or other combination of any of the
Limited Partners with or into any other Person or the transfer by any of the
Limited Partners of all or substantially all of its assets to another Person,
and following any such transfer such Person may become a Substituted Limited
Partner pursuant to Article X. Except as set forth in the immediately preceding
sentence, or in connection with any pledge of (or any related foreclosure on)
the Limited Partner's Partnership Interest as a limited partner of the
Partnership solely for the purpose of securing, directly or indirectly,
indebtedness of the Partnership or the MLP, and a Limited Partner may not
transfer all or any part of its Partnership Interest or withdraw from the
Partnership.
4.4 RESTRICTIONS ON TRANSFERS.
(a) Notwithstanding the other provisions of this Article IV,
no transfer of any Partnership Interest shall be made if such transfer would (i)
violate the then applicable federal or state securities laws or rules and
regulations of the Commission, any state securities commission or any other
governmental authorities with jurisdiction over such transfer, (ii) terminate
the existence or qualification of the Partnership or the MLP under the laws of
the jurisdiction of its formation or (iii) cause the Partnership or the MLP to
be treated as an association taxable as a corporation or otherwise to be taxed
as an entity for federal income tax purposes (to the extent not already so
treated or taxed).
(b) The Board of Supervisors may impose restrictions on the
transfer of Partnership Interests if a subsequent Opinion of Counsel determines
that such restrictions are necessary to avoid a significant risk of the
Partnership or the MLP becoming taxable as a corporation or otherwise to be
taxed as an entity for federal income tax purposes. The restrictions may be
imposed by making such amendments to this Agreement as the Board of Supervisors
may determine to be necessary or appropriate to impose such restrictions.
ARTICLE V
CONTRIBUTIONS AND INITIAL TRANSFERS
5.1 ORGANIZATIONAL CONTRIBUTIONS.
In connection with the formation of the Partnership under the
Delaware Act, the Initial General Partner made an initial Capital Contribution
to the Partnership and was admitted as the general partner of the Partnership,
and the MLP made an initial Capital Contribution to the Partnership and was
admitted as a limited partner of the Partnership.
5.2 CONTRIBUTIONS AND TRANSFERS ON THE INITIAL CLOSING DATE AND
THE CLOSING DATE.
On the Initial Closing Date, (i) the MLP transferred cash to
the Partnership in exchange for a limited partner interest in the Partnership
and a certain amount of cash and (ii) QCC transferred certain assets to the
Partnership in exchange for a limited partner interest and a general partner
interest in the Partnership, which QCC contributed to the capital of the Initial
General Partner. The Initial General Partner then transferred the limited
partner interest contributed to it by QCC to the MLP. As a result of the
formation transactions, the Initial General Partner's Percentage Interest was
1.0101% and the MLP's Percentage Interest was 98.9899%.
5.3 ADDITIONAL CAPITAL CONTRIBUTIONS.
With the consent of the Board of Supervisors, any Limited
Partner may, but shall not be obligated to, make additional Capital
Contributions to the Partnership. Contemporaneously with the making of any
Capital Contributions by a Limited Partner, the General Partner may, but shall
not be obligated to, make an additional Capital Contribution to the Partnership
in an amount equal to 1.0101 / 98.9899 of the Net Agreed Value of the additional
Capital Contribution then made by such Limited Partner. Except as set forth in
the immediately preceding sentence and Article XII, the General Partner shall
not be obligated to make any additional Capital Contributions to the
Partnership.
5.4 INTEREST AND WITHDRAWAL.
No interest shall be paid by the Partnership on Capital
Contributions, and no Partner shall be entitled to withdrawal or return of any
part of its Capital Contributions or to receive any distribution from the
Partnership, except as provided in Articles VI, XI and XII.
5.5 CAPITAL ACCOUNTS.
(a) The Partnership shall maintain for each Partner owning a
Partnership Interest a separate Capital Account with respect to such Partnership
Interest in accordance with the rules of Treasury Regulation Section
1.704-1(b)(2)(iv). Such Capital Account shall be increased by (i) the amount of
all Capital Contributions made to the Partnership with respect to such
Partnership Interest pursuant to this Agreement (or the Original Agreement) and
(ii) all items of Partnership income and gain (including, without limitation,
income and gain exempt from tax) computed in accordance with Section 5.5(b) and
allocated with respect to such Partnership Interest pursuant to Section 6.1, and
decreased by (x) the amount of cash or the Net Agreed Value of all actual and
deemed distributions of cash or property made with respect to such Partnership
Interest pursuant to this Agreement (or the Original Agreement) and (y) all
items of Partnership deduction and loss computed in accordance with Section
5.5(b) and allocated with respect to such Partnership Interest pursuant to
Section 6.1.
(b) For purposes of computing the amount of any item of
income, gain, loss or deduction which is to be allocated pursuant to Article VI
and is to be reflected in the Partners' Capital Accounts, the determination,
recognition and classification of any such item shall be the same as its
determination, recognition and classification for federal income tax purposes
(including, without limitation, any method of depreciation, cost recovery or
amortization used for that purpose), provided, that:
(i) Solely for purposes of this Section 5.5, the Partnership
shall be treated as owning directly its proportionate share (as
determined by the Board of Supervisors) of all property owned by any
OLP Subsidiary that is classified as a partnership for federal income
tax purposes.
(ii) All fees and other expenses incurred by the Partnership
to promote the sale of (or to sell) a Partnership Interest that can
neither be deducted nor amortized under Section 709 of the Code, if
any, shall, for purposes of Capital Account maintenance, be treated as
an item of deduction at the time such fees and other expenses are
incurred and shall be allocated among the Partners pursuant to Section
6.1.
(iii) Except as otherwise provided in Treasury Regulation
Section 1.704-1(b)(2)(iv)(m), the computation of all items of income,
gain, loss and deduction shall be made without regard to any election
under Section 754 of the Code which may be made by the Partnership and,
as to those items described in Section 705(a)(1)(B) or 705(a)(2)(B) of
the Code, without regard to the fact that such items are not includable
in gross income or are neither currently deductible nor capitalized for
federal income tax purposes. To the extent an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Section 734(b)
or 743(b) of the Code is required, pursuant to Treasury Regulation
Section 1.704-2(b)(2)(iv)(m) to be taken into account in determining
Capital Accounts, the amount of such adjustment in the Capital Accounts
shall be treated as an item of gain or loss.
(iv) Any income, gain or loss attributable to the taxable
disposition of any Partnership property shall be determined as if the
adjusted basis of such property as of such date of disposition were
equal in amount to the Partnership's Carrying Value with respect to
such property as of such date.
(v) In accordance with the requirements of Section 704(b) of
the Code, any deductions for depreciation, cost recovery or
amortization attributable to any Contributed Property shall be
determined as if the adjusted basis of such property on the date it was
acquired by the Partnership were equal to the Agreed Value of such
property. Upon an adjustment pursuant to Section 5.5(d) to the Carrying
Value of any Partnership property subject to depreciation, cost
recovery or amortization, any further deductions for such depreciation,
cost recovery or amortization attributable to such property shall be
determined (A) as if the adjusted basis of such property were equal to
the Carrying Value of such property immediately following such
adjustment and (B) using a rate of depreciation, cost recovery or
amortization derived from the same method and useful life (or, if
applicable, the remaining useful life) as is applied for federal income
tax purposes; PROVIDED, HOWEVER, that, if the asset has a zero adjusted
basis for federal income tax purposes, depreciation, cost recovery or
amortization deductions shall be determined using any reasonable method
that the Board of Supervisors may adopt.
(vi) If the Partnership's adjusted basis in a depreciable or
cost recovery property is reduced for federal income tax purposes
pursuant to Section 48(q)(1) or 48(q)(3) of the Code, the amount of
such reduction shall, solely for purposes hereof, be deemed to be an
additional depreciation or cost recovery deduction in the year such
property is placed in service and shall be allocated among the Partners
pursuant to Section 6.1. Any restoration of such basis pursuant to
Section 48(q)(2) of the Code shall, to the extent possible, be
allocated in the same manner to the Partners to whom such deemed
deduction was allocated.
(c) A transferee of a Partnership Interest shall succeed to a
pro rata portion of the Capital Account of the transferor relating to the
Partnership Interest so transferred.
(d) (i) In accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(f), on an issuance of additional Partnership
Interests for cash or Contributed Property, the Capital Account of all
Partners and the Carrying Value of each Partnership property
immediately prior to such issuance shall be adjusted upward or downward
to reflect any Unrealized Gain or Unrealized Loss attributable to such
Partnership property, as if such Unrealized Gain or Unrealized Loss had
been recognized on an actual sale of each such property immediately
prior to such issuance and had been allocated to the Partners at such
time pursuant to Section 6.1. In determining such Unrealized Gain or
Unrealized Loss, the aggregate cash amount and fair market value of all
Partnership assets (including, without limitation, cash or cash
equivalents) immediately prior to the issuance of additional
Partnership Interests shall be determined by the Board of Supervisors
using such reasonable method of valuation as it may adopt; PROVIDED,
HOWEVER, that the Board of Supervisors, in arriving at such valuation,
must take fully into account the fair market value of the Partnership
Interests of all Partners at such time. The Board of Supervisors shall
allocate such aggregate value among the assets of the Partnership (in
such manner as it determines in its discretion to be reasonable) to
arrive at a fair market value for individual properties.
(ii) In accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(f), immediately prior to any actual or deemed
distribution to a Partner of any Partnership property (other than a
distribution of cash that is not in redemption or retirement of a
Partnership Interest), the Capital Accounts of all Partners and the
Carrying Value of all Partnership property shall be adjusted upward or
downward to reflect any Unrealized Gain or Unrealized Loss attributable
to such Partnership property, as if such Unrealized Gain or Unrealized
Loss had been recognized in a sale of such property immediately prior
to such distribution for an amount equal to its fair market value, and
had been allocated to the Partners, at such time, pursuant to Section
6.1. In determining such Unrealized Gain or Unrealized Loss the
aggregate cash amount and fair market value of all Partnership assets
(including, without limitation, cash or cash equivalents) immediately
prior to a distribution shall (A) in the case of an actual distribution
which is not made pursuant to Section 12.4, be determined and allocated
in the same manner as that provided in Section 5.5(d)(i) or (B) in the
case of a liquidating distribution pursuant to Section 12.4, be
determined and allocated by the Liquidator using such reasonable method
of valuation as it may adopt.
5.6 LOANS FROM PARTNERS.
Loans by a Partner to the Partnership shall not constitute
Capital Contributions. If any Partner shall advance funds to the Partnership in
excess of the amounts required hereunder to be contributed by it to the capital
of the Partnership, the making of such excess advances shall not result in any
increase in the amount of the Capital Account of such Partner. The amount of any
such excess advances shall be a debt obligation of the Partnership to such
Partner and shall be payable or collectible only out of the Partnership assets
in accordance with the terms and conditions upon which such advances are made.
5.7 LIMITED PREEMPTIVE RIGHTS.
Except as provided in Section 5.3, no Person shall have any
preemptive, preferential or other similar rights with respect to (a) additional
Capital Contributions; (b) issuance or sale of any class or series of
Partnership Interests, whether unissued, held in the treasury or hereafter
created; (c) issuance of any obligations, evidences of indebtedness or other
securities of the Partnership convertible into or exchangeable for, or carrying
or accompanied by any rights to receive, purchase or subscribe to, any such
partnership Interests; (d) issuance of any right of subscription to or right to
receive, or any warrant or option for the purchase of, any such Partnership
Interests; or (e) issuance or sale of any other securities that may be issued or
sold by the Partnership.
5.8 FULLY PAID AND NON-ASSESSABLE NATURE OF LIMITED PARTNER
PARTNERSHIP INTERESTS.
All Limited Partner Partnership Interests issued pursuant to,
and in accordance with the requirements of, this Article V shall be fully paid
and non-assessable Partnership Interests in the Partnership, except as such
non-assessability may be affected by Section 17-607 of the Delaware Act.
ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS
6.1 ALLOCATIONS FOR CAPITAL ACCOUNT PURPOSES.
(a) General. In maintaining the Capital Accounts that
determine the rights of the Partners among themselves, the Partnership's items
of income, gain, loss and deduction (computed in accordance with Section
5.5(b)), including Net Termination Gain and Net Termination Loss, shall be
allocated among the Partners in accordance with their relative Percentage
Interests, except as otherwise provided below.
(b) Limitation on Losses. Any deduction otherwise allocable to
a Limited Partner that would create or add to a deficit in its Adjusted Capital
Account shall instead be allocated to the General Partner. Thereafter, any
income that would otherwise be allocable to such Limited Partner shall be
allocated to the General Partner until the aggregate amount so allocated under
this sentence equals the aggregate deductions previously allocated to the
General Partner under the preceding sentence.
(c) Special Allocations. Notwithstanding any other provision
of this Section 6.1, the following special allocations shall be made for such
taxable period:
(i) PARTNERSHIP MINIMUM GAIN CHARGEBACK. Notwithstanding any
other provision of this Section 6.1, if there is a net decrease in
Partnership Minimum Gain during any Partnership taxable period, each
Partner shall be allocated items of Partnership income and gain for
such period (and, if necessary, subsequent periods) in the manner and
amounts provided in Treasury Regulation Sections 1.704-2(f)(6),
1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For
purposes of this Section 6.1(c), each Partner's Adjusted Capital
Account balance shall be determined, and the allocation of income or
gain required hereunder shall be effected, prior to the application of
any other allocations pursuant to this Section 6.1(c) with respect to
such taxable period (other than an allocation pursuant to Sections
6.1(c)(v) and 6.1(c)(vi)). This Section 6.1(c)(i) is intended to comply
with the Partnership Minimum Gain chargeback requirement in Treasury
Regulation Section 1.704-2(f) and shall be interpreted consistently
therewith.
(ii) CHARGEBACK OF PARTNER NONRECOURSE DEBT MINIMUM GAIN.
Notwithstanding the other provisions of this Section 6.1 (other than
Section 6.l(c)(i)), except as provided in Treasury Regulation Section
1.704-2(i)(4), if there is a net decrease in Partner Nonrecourse Debt
Minimum Gain during any Partnership taxable period, any Partner with a
share of Partner Nonrecourse Debt Minimum Gain at the beginning of such
taxable period shall be allocated items of Partnership income and gain
for such period (and, if necessary, subsequent periods) in the manner
and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and
1.704-2(j)(2)(ii), or any successor provisions. For purposes of this
Section 6.1(c), each Partner's Adjusted Capital Account balance shall
be determined, and the allocation of income or gain required hereunder
shall be effected, prior to the application of any other allocations
pursuant to this Section 6.1(c), other than Section 6.1(c)(i) and other
than an allocation pursuant to Sections 6.1(c)(v) and 6.1(c)(vi), with
respect to such taxable period. This Section 6.1(c)(ii) is intended to
comply with the chargeback of items of income and gain requirement in
Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted
consistently therewith.
(iii) QUALIFIED INCOME OFFSET. In the event any Partner
unexpectedly receives any adjustments, allocations or distributions
described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items of
Partnership income and gain shall be specially allocated to such
Partner in an amount and manner sufficient to eliminate, to the extent
required by the Treasury Regulations promulgated under Section 704(b)
of the Code, the deficit balance, if any, in its Adjusted Capital
Account created by such adjustments, allocations or distributions as
quickly as possible unless such deficit balance is otherwise eliminated
pursuant to Section 6.1(c)(i) or (ii).
(iv) GROSS INCOME ALLOCATIONS. In the event any Partner has a
deficit balance in its Capital Account at the end of any Partnership
taxable period in excess of the sum of (A) the amount such Partner is
required to restore pursuant to the provisions of this Agreement and
(B) the amount such Partner is deemed obligated to restore pursuant to
Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Partner
shall be specially allocated items of Partnership gross income and gain
in the amount of such excess as quickly as possible; provided, that an
allocation pursuant to this Section 6.1(c)(iv) shall be made only if
and to the extent that such Partner would have a deficit balance in its
Capital Account as adjusted after all other allocations provided for in
this Section 6.1 have been tentatively made as if this Section
6.1(c)(iv) were not in this Agreement.
(v) NONRECOURSE DEDUCTIONS. Nonrecourse Deductions for any
taxable period shall be allocated to the Partners in accordance with
their respective Percentage Interests. If the Board of Supervisors
determines in its good faith discretion that the Partnership's
Nonrecourse Deductions must be allocated in a different ratio to
satisfy the safe harbor requirements of the Treasury Regulations
promulgated under Section 704(b) of the Code, the Board of Supervisors
is authorized, upon notice to the Limited Partners, to revise the
prescribed ratio to the numerically closest ratio that does satisfy
such requirements.
(vi) PARTNER NONRECOURSE DEDUCTIONS. Partner Nonrecourse
Deductions for any taxable period shall be allocated 100% to the
Partner that bears the Economic Risk of Loss with respect to the
Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions
are attributable in accordance with Treasury Regulation Section
1.704-2(i). If more than one Partner bears the Economic Risk of Loss
with respect to a Partner Nonrecourse Debt, such Partner Nonrecourse
Deductions attributable thereto shall be allocated between or among
such Partners in accordance with the ratios in which they share such
Economic Risk of Loss.
(vii) NONRECOURSE LIABILITIES. For purposes of Treasury
Regulation Section 1.752-3(a)(3), the Partners agree that Nonrecourse
Liabilities of the Partnership in excess of the sum of (A) the amount
of Partnership Minimum Gain and (B) the total amount of Nonrecourse
Built-in Gain shall be allocated among the Partners in accordance with
their respective Percentage Interests.
(viii)CODE SECTION 754 ADJUSTMENTS. To the extent an
adjustment to the adjusted tax basis of any Partnership asset pursuant
to Section 734(b) or 743(c) of the Code is required, pursuant to
Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into
account in determining Capital Accounts, the amount of such adjustment
to the Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis), and such item of gain or loss shall be specially
allocated to the Partners in a manner consistent with the manner in
which their Capital Accounts are required to be adjusted pursuant to
such Section of the Treasury Regulations.
(ix) CURATIVE ALLOCATION.
(A) Notwithstanding any other provision of this
Section 6.1, other than the Required Allocations, the Required
Allocations shall be taken into account in making the Agreed
Allocations so that, to the extent possible, the net amount of
items of income, gain, loss and deduction allocated to each
Partner pursuant to the Required Allocations and the Agreed
Allocations, together, shall be equal to the net amount of
such items that would have been allocated to each such Partner
under the Agreed Allocations had the Required Allocations and
the related Curative Allocation not otherwise been provided in
this Section 6.1. Notwithstanding the preceding sentence,
Required Allocations relating to (1) Nonrecourse Deductions
shall not be taken into account except to the extent that
there has been a decrease in Partnership Minimum Gain and (2)
Partner Nonrecourse Deductions shall not be taken into account
except to the extent that there has been a decrease in Partner
Nonrecourse Debt Minimum Gain. Allocations pursuant to this
Section 6.1(c)(ix)(A) shall only be made with respect to
Required Allocations to the extent the General Partner
reasonably determines that such allocations will otherwise be
inconsistent with the economic agreement among the Partners.
Further, allocations pursuant to this Section 6.1(c)(ix)(A)
shall be deferred with respect to allocations pursuant to
clauses (1) and (2) hereof to the extent the Board of
Supervisors reasonably determines that such allocations are
likely to be offset by subsequent Required Allocations.
(B) The Board of Supervisors shall have reasonable
discretion, with respect to each taxable period, to (1) apply
the provisions of Section 6.1(c)(ix)(A) in whatever order is
most likely to minimize the economic distortions that might
otherwise result from the Required Allocations, and (2) divide
all allocations pursuant to Section 6.1(c)(ix)(A) among the
Partners in a manner that is likely to minimize such economic
distortions.
(x) GENERAL ECONOMIC CORRECTIVE ALLOCATION. Notwithstanding
any other provision of this Section 6.1 (other than the Required
Allocations), the General Partner may allocate items of income, gain,
loss and deduction for any taxable year in such manner as it
determines, in its reasonable discretion, is necessary so that, when
made, distributions in liquidation of the Partnership in accordance
with Section 12.4 shall correspond as closely as possible to the
economic arrangement reflected in Section 6.1(a).
6.2 ALLOCATIONS FOR TAX PURPOSES.
(a) GENERAL. Except as otherwise provided herein, for federal
income tax purposes, each item of income, gain, loss and deduction shall be
allocated among the Partners in the same manner as its correlative item of
"book" income, gain, loss or deduction is allocated pursuant to Section 6.1.
(b) CONTRIBUTED PROPERTY. In an attempt to eliminate Book-Tax
Disparities attributable to a Contributed Property or Adjusted Property, items
of income, gain, loss, depreciation, amortization and cost recovery deductions
shall be allocated for federal income tax purposes among the Partners as
follows:
(i) (A) In the case of a Contributed Property, such items
attributable thereto shall be allocated among the Partners in the
manner provided under Section 704(c) of the Code that takes into
account the variation between the Agreed Value of such property and its
adjusted basis at the time of contribution; and (B) any item of
Residual Gain or Residual Loss attributable to a Contributed Property
shall be allocated among the Partners in the same manner as its
correlative item of "book" gain or loss is allocated pursuant to
Section 6.1.
(ii) (A) In the case of an Adjusted Property, such items shall
(1) first, be allocated among the Partners in a manner consistent with
the principles of Section 704(c) of the Code to take into account the
Unrealized Gain or Unrealized Loss attributable to such property and
the allocations thereof pursuant to Section 5.5(d)(i) or (ii), and (2)
second, in the event such property was originally a Contributed
Property, be allocated among the Partners in a manner consistent with
Section 6.2(b)(i)(A); and (B) any item of Residual Gain or Residual
Loss attributable to an Adjusted Property shall be allocated among the
Partners in the same manner as its correlative item of "book" gain or
loss is allocated pursuant to Section 6.1.
(iii) The Board of Supervisors shall apply the principles of
Treasury Regulation Section 1.704-3(d) to eliminate Book-Tax
Disparities.
(c) DISCRETIONARY ALLOCATION AUTHORITY. For the proper
administration of the Partnership and for the preservation of uniformity of the
Units of the MLP (or any class or classes thereof), the Board of Supervisors
shall have sole discretion to (i) adopt such conventions as it deems appropriate
in determining the amount of depreciation, amortization and cost recovery
deductions; (ii) make special allocations for federal income tax purposes of
income (including, without limitation, gross income) or deductions; and (iii)
amend the provisions of this Agreement as appropriate (x) to reflect the
proposal or promulgation of Treasury Regulations under Section 704(b) or Section
704(c) of the Code or (y) otherwise to preserve or achieve uniformity of the
Units of the MLP (or any class or classes thereof). The Board of Supervisors may
adopt such conventions, make such allocations and make such amendments to this
Agreement as provided in this Section 6.2(c) only if such conventions,
allocations or amendments would not have a material adverse effect on the
Partners, the holders of any class or classes of Units issued and outstanding or
the Partnership, and if such allocations are consistent with the principles of
Section 704 of the Code.
(d) DISCRETIONARY AMORTIZATION AUTHORITY. The Board of
Supervisors in its discretion may determine to depreciate or amortize the
portion of an adjustment under Section 743(b) of the Code attributable to
unrealized appreciation in any Adjusted Property (to the extent of the
unamortized Book-Tax Disparity) using a predetermined rate derived from the
depreciation or amortization method and useful life applied to the Partnership's
common basis of such property, despite any inconsistency of such approach with
Treasury Regulation Section 1.167(c)-1(a)(6) and Proposed Treasury Regulation
Section 1.197-2(g)(3). If the Board of Supervisors determines that such
reporting position cannot reasonably be taken, the Board of Supervisors may
adopt depreciation and amortization conventions under which all purchasers
acquiring Units of the MLP in the same month would receive depreciation and
amortization deductions, based upon the same applicable rate as if they had
purchased a direct interest in the Partnership's property. If the Board of
Supervisors chooses not to utilize such aggregate method, the Board of
Supervisors may use any other reasonable depreciation and amortization
conventions to preserve the uniformity of the intrinsic tax characteristics of
any Units that would not have a material adverse effect on any Limited Partner
or the holders of any class or classes of Units.
(e) RECAPTURE INCOME. Any gain allocated to the Partners upon
the sale or other taxable disposition of any Partnership asset shall, to the
extent possible, after taking into account other required allocations of gain
pursuant to this Section 6.2, be characterized as Recapture Income in the same
proportions and to the same extent as such Partners (or their predecessors in
interest) have been allocated any deductions directly or indirectly giving rise
to the treatment of such gains as Recapture Income.
(f) EFFECT OF SECTION 754 ELECTION. All items of income, gain,
loss, deduction and credit recognized by the Partnership for federal income tax
purposes and allocated to the Partners in accordance with the provisions hereof
shall be determined without regard to any election under Section 754 of the Code
which may be made by the Partnership; PROVIDED, HOWEVER, that such allocations,
once made, shall be adjusted as necessary or appropriate to take into account
those adjustments permitted or required by Sections 734 and 743 of the Code.
(g) PRORATION. The Board of Supervisors may adopt such methods
of allocation of income, gain, loss or deduction between a transferor and a
transferee of a Partnership Interest as it determines necessary, to the extent
permitted or required by Section 706 of the Code and the regulations or rulings
promulgated thereunder.
6.3 SPECIAL DISTRIBUTION.
At the Closing, the Partnership shall, subject to Section
17-607 of the Delaware Act, distribute to the MLP, without a corresponding
distribution to the Initial General Partner, $69.0 million in cash to fund the
Redemption.
6.4 GENERAL DISTRIBUTIONS.
(a) Within 45 days following the end of each Quarter
commencing with the Quarter ending on June 29, 1996, an amount equal to 100% of
Available Cash with respect to such Quarter shall be distributed in accordance
with this Article VI by the Partnership to the Partners in accordance with their
respective Percentage Interests. The immediately preceding sentence shall not
require any distribution of cash if and to the extent such distribution would be
prohibited by applicable law or by any loan agreement, security agreement,
mortgage, debt instrument or other agreement or obligation to which the
Partnership is a party or by which it is bound or its assets are subject. All
distributions required to be made under this Agreement shall be made subject to
Section 17-607 of the Delaware Act.
(b) In the event of the dissolution and liquidation of the
Partnership, all receipts received during or after the Quarter in which the
Liquidation Date occurs, except as otherwise provided in (a)(ii) of the
definition of Available Cash, shall be applied and distributed solely in
accordance with, and subject to the terms and conditions of, Section 12.4.
(c) The Board of Supervisors shall have the discretion to
treat taxes paid by the Partnership on behalf of, or amounts withheld with
respect to, all or less than all of the Partners, as a distribution of Available
Cash to such Partners.
ARTICLE VII
MANAGEMENT AND OPERATION OF BUSINESS
7.1 MANAGEMENT.
(a) Except as otherwise expressly provided in this Agreement,
all management powers over the business and affairs of the Partnership shall be
vested exclusively in the Board of Supervisors, and subject to the direction of
the Board of Supervisors and in accordance with the provisions of Section 7.9,
the Officers. Neither the General Partner (except as otherwise expressly
provided in this Agreement) nor any Limited Partner shall have any management
power or control over the business and affairs of the Partnership. Thus, except
as otherwise expressly provided in this Agreement, the business and affairs of
the Partnership shall be managed by or under the direction of the Board of
Supervisors, and the day-to-day activities of the Partnership shall be conducted
on the Partnership's behalf by the Officers, who shall be agents of the
Partnership. In order to enable the Board of Supervisors to manage the business
and affairs of the Partnership, the General Partner, except as otherwise
expressly provided in this Agreement, hereby irrevocably delegates to the Board
of Supervisors all management powers over the business and affairs of the
Partnership that it may now or hereafter possess under applicable law. The
General Partner further agrees to take any and all action necessary and
appropriate, in the sole discretion of the Board of Supervisors, to effect any
duly authorized actions by the Board of Supervisors or any Officer, including
executing or filing any agreements, instruments or certificates, delivering all
documents, providing all information and taking or refraining from taking action
as may be necessary or appropriate to achieve the effective delegation of power
described in this Section 7.1(a). Each of the Partners and each Person who may
acquire an interest in a Partnership Interest hereby approves, consents to,
ratifies and confirms such delegation. The delegation by the General Partner to
the Board of Supervisors of management powers over the business and affairs of
the Partnership pursuant to the provisions of this Agreement shall not cause the
General Partner to cease to be a general partner of the Partnership nor shall it
cause the Board of Supervisors or any member thereof to be a general partner of
the Partnership or to have or be subject to the liabilities of a general partner
of the Partnership. Except as otherwise specifically provided in Sections 7.13,
7.14, 7.15 and 7.16, the authority, functions, duties and responsibilities of
the Board of Supervisors and of the Officers shall be identical to the
authority, functions, duties and responsibilities of the board of directors and
officers, respectively, of a corporation organized under the Delaware General
Corporation Law.
(b) Consistent with the management powers delegated to the
Board of Supervisors pursuant to the provisions of this Agreement, the Board of
Supervisors shall have the powers now or hereafter granted a general partner of
a limited partnership under the Delaware Act or any other applicable law and,
except as otherwise expressly provided in this Agreement, shall have full power
and authority to do all things and on such terms as it may deem necessary or
appropriate to conduct the business of the Partnership, to exercise all powers
set forth in Section 2.5 and to effectuate the purposes set forth in Section
2.4, including the following:
(i) the making of any expenditures, the lending or
borrowing of money, the assumption or guarantee of, or other
contracting for, indebtedness and other liabilities, the issuance of
evidences of indebtedness and the incurring of any other obligations;
(ii) the making of tax, regulatory and other
filings, or rendering of periodic or other reports to governmental or
other agencies having jurisdiction over the business or assets of the
Partnership;
(iii) the acquisition, disposition, mortgage, pledge,
encumbrance, hypothecation or exchange of any or all of the assets of
the Partnership or the merger or other combination of the Partnership
with or into another Person;
(iv) the use of the assets of the Partnership
(including cash on hand) for any purpose consistent with the terms of
this Agreement, including the financing of the conduct of the
operations of any Group Member, the lending of funds to other Persons
(including the MLP or any Subsidiary of the MLP), the repayment of
obligations of any Group Member, the MLP or any Subsidiary of the MLP
and the making of capital contributions to any Group Member, the MLP or
any Subsidiary of the MLP.
(v) the negotiation, execution and performance of
any contracts, conveyances or other instruments (including instruments
that limit the liability of the Partnership under contractual
arrangements to all or particular assets of the Partnership, with the
other party to the contract to have no recourse against the General
Partner or its assets other than its interest in the Partnership, even
if same results in the terms of the transaction being less favorable to
the Partnership than would otherwise be the case);
(vi) the distribution of Partnership cash;
(vii) the selection and dismissal of employees
(including employees who are Officers) and agents, outside attorneys,
accountants, consultants and contractors and the determination of their
compensation and other terms of employment or hiring;
(viii)the maintenance of such insurance for the
benefit of the Partnership Group and the Partners (including the assets
of the Partnership) as it deems necessary or appropriate,
(ix) the formation of, or acquisition of an interest
in, and the contribution of property and the making of loans to, any
further limited or general partnerships, joint ventures, corporations,
limited liability companies or other relationships;
(x) the control of any matters affecting the rights
and obligations of the Partnership, including the bringing and
defending of actions at law or in equity and otherwise engaging in the
conduct of litigation and the incurring of legal expense and the
settlement of claims and litigation; and
(xi) the indemnification of any Person against
liabilities and contingencies to the extent permitted by law.
(c) Notwithstanding any other provision of this Agreement and
the MLP Agreement, and to the fullest extent permitted by applicable law, each
of the Partners hereby (i) approves, consents to, ratifies and confirms the
General Partner's delegation of management powers to the Board of Supervisors
pursuant to paragraph (a) of this Section 7.1; (ii) approves, consents to,
ratifies and confirms the execution, delivery and performance by the parties
thereto of the MLP Agreement, the Recapitalization Agreement, the Purchase
Agreement and the other agreements described in or filed as a part of the Proxy
Statement; (iii) agrees that the Partnership (through any duly authorized
Officer of the Partnership) is authorized to execute, deliver and perform the
agreements referred to in clause (i) of this sentence and the other agreements,
acts, transactions and matters described in or contemplated by the Proxy
Statement without any further act, approval or vote of the Partners; and (iv)
agrees that the execution, delivery or performance by the General Partner, the
MLP, the Board of Supervisors or any member thereof, any duly authorized Officer
of the Partnership, any Group Member or any Affiliate of any of them, of this
Agreement or any agreement authorized or permitted under this Agreement, shall
not constitute a breach by any such Person of any duty that any of such Persons
may owe the Partnership, a Limited Partner or any other Persons under this
Agreement (or any other agreements) or of any duty stated or implied by law or
equity.
7.2 THE BOARD OF SUPERVISORS; APPOINTMENT; MANNER OF ACTING.
(a) The Board of Supervisors shall consist of the five
individuals who serve as members of the board of supervisors of the MLP.
(b) Each member of the Board of Supervisors shall have one
vote. The vote of the majority of the members of the Board of Supervisors
present at a meeting at which a quorum is present shall be the act of the Board
of Supervisors. A majority of the number of members of the Board of Supervisors
then in office shall constitute a quorum for the transaction of business at any
meeting of the Board of Supervisors, but if less than a quorum is present at a
meeting, a majority of the members of the Board of Supervisors present at such
meeting may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
7.3 REMOVAL OF MEMBERS OF THE BOARD OF SUPERVISORS. .
Any member of the Board of Supervisors may be removed with or
without Cause, by the affirmative vote of the majority of the members of the
Board of Supervisors of the MLP, but only if such person is also removed as a
member of the MLP's board of supervisors; PROVIDED that his or her successor on
the MLP's board of supervisors is elected or appointed in the manner set forth
in the MLP Agreement. If an individual who is a member of the board of
supervisors of the MLP is removed from such board, such individual will
automatically be removed from the Board of Supervisors.
7.4 RESIGNATIONS of MEMBERS OF THE BOARD OF SUPERVISORS. .
Any member of the Board of Supervisors may resign at any time
by giving written notice to the Board of Supervisors. Such resignation shall
take effect at the time specified therein, but only if such person also resigns
from the MLP's board of supervisors. If an individual who is a member of the
board of supervisors of the MLP resigns from such board, such individual will
automatically be deemed to have resigned from the Board of Supervisors.
7.5 VACANCIES ON THE BOARD OF SUPERVISORS. .
If any Supervisor is removed, resigns or is otherwise unable
to serve as a member of the Board of Supervisors, the Board of Supervisors of
the MLP shall in its sole discretion, appoint an individual to fill the vacancy
for the unexpired term of such Supervisor's predecessor in office, who is the
same individual appointed to fill the corresponding vacancy on the MLP's board
of supervisors.
7.6 MEETINGS; COMMITTEES; CHAIRMAN. .
(a) Regular meetings of the Board of Supervisors shall be held
at such times and places as shall be designated from time to time by resolution
of the Board of Supervisors. Notice of such regular meetings shall not be
required. Special meetings of the Board of Supervisors may be called by written
request of a majority of the members of the Board of Supervisors, on at least 48
hours prior written notice to the other members. Any such notice, or waiver
thereof, need not state the purpose of such meeting except as may otherwise be
required by law. Attendance of a member of the Board of Supervisors at a meeting
(including pursuant to the penultimate sentence of this Section 7.6(a)) shall
constitute a waiver of notice of such meeting, except where such member attends
the meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting is not lawfully called or convened. Any
action required or permitted to be taken at a meeting of the Board of
Supervisors may be taken without a meeting, without prior notice and without a
vote if a consent or consents in writing, setting forth the action so taken, is
signed by all the members of the Board of Supervisors. Members of the Board of
Supervisors may participate in and hold meetings by means of conference
telephone, videoconference or similar communications equipment by means of which
all Persons participating in the meeting can hear each other, and participation
in such meetings shall constitute presence in person at the meeting. The Board
of Supervisors may establish any additional rules governing the conduct of its
meetings that are not inconsistent with the provisions of this Agreement.
(b) The Board of Supervisors shall appoint the Audit Committee
to consist solely of the individuals who serve as the audit committee of the
MLP. The Audit Committee shall perform the functions delegated to it pursuant to
the terms of this Agreement and such other matters as may be delegated to it
from time to time by resolution of the Board of Supervisors. The Board of
Supervisors, by a majority of the whole Board of Supervisors, may appoint one or
more additional committees of the Board of Supervisors to consist of one or more
members of the Board of Supervisors, which committee(s) shall have and may
exercise such of the powers and authority of the Board of Supervisors (including
in respect of Section 7.1) with respect to the management of the business and
affairs of the Partnership as may be provided in a resolution of the Board of
Supervisors. Any committee designated pursuant to this Section 7.6(b) shall
choose its own chairman, shall keep regular minutes of its proceedings and
report the same to the Board of Supervisors when requested, shall fix its own
rules or procedures and shall meet at such times and at such place or places as
may be provided by such rules or by resolution of such committee or resolution
of the Board of Supervisors. At every meeting of any such committee, the
presence of a majority of all the members thereof shall constitute a quorum and
the affirmative vote of a majority of the members present shall be necessary for
the taking of any action. Subject to the first sentence of this Section 7.6(b),
the Board of Supervisors may designate one or more members of the Board of
Supervisors as alternate members of any committee who may replace any absent or
disqualified member at any meeting of such committee. Subject to the first
sentence of this Section 7.6(b), in the absence or disqualification of a member
of a committee, the member or members present at any meeting and not
disqualified from voting, whether or not constituting a quorum, may unanimously
appoint another member of the Board of Supervisors to act at the meeting in the
place of the absent or disqualified member.
(c) The Board of Supervisors may elect one of its members as
Chairman of the Board of Supervisors. The Chairman of the Board of Supervisors,
if any, and if present and acting, shall preside at all meetings of the Board of
Supervisors. In the absence of the Chairman of the Board of Supervisors, the
Vice Chairman of the Board of Supervisors if any, and if present and acting,
shall preside at all meetings of the Board of Supervisors. In the absence of the
Chairman of the Board of Supervisors and the Vice Chairman of the Board of
Supervisors, the President, if present, acting and a member of the Board of
Supervisors, or any other member of the Board of Supervisors chosen by the Board
of Supervisors shall preside.
7.7 OFFICERS .
(a) GENERALLY. The Board of Supervisors, as set forth below,
shall appoint agents of the Partnership, referred to as "Officers" of the
Partnership as described in this Section 7.7. Unless provided otherwise by
resolution of the Board of Supervisors, the Officers shall have the titles,
power, authority and duties described below in this Section 7.7.
(b) TITLES AND NUMBER. The Officers shall be the Chairman of
the Board of Supervisors (unless the Board of Supervisors provides otherwise),
the Vice Chairman of the Board of Supervisors (unless the Board of Supervisors
provides otherwise), the President, any and all Vice Presidents, the Secretary
and any and all Assistant Secretaries and any Treasurer and any and all
Assistant Treasurers and any other Officers appointed pursuant to Section
7.7(i). There shall be appointed from time to time, in accordance with this
Section 7.7, such Vice Presidents, Secretaries, Assistant Secretaries,
Treasurers and Assistant Treasurers as the Board of Supervisors may desire. Any
person may hold two or more offices.
(c) APPOINTMENT AND TERM OF OFFICE. The Officers shall be
appointed by the Board of Supervisors at such time and for such terms as the
Board of Supervisors shall determine. Any Officer may be removed, with or
without Cause, only by the Board of Supervisors. Vacancies in any office may be
filled only by the Board of Supervisors.
(d) CHAIRMAN OF THE BOARD OF SUPERVISORS. The Board of
Supervisors may elect one of its members as the Chairman of the Board of
Supervisors. Unless the Board of Supervisors provides otherwise, the Chairman of
the Board of Supervisors shall be an Officer, and shall have the powers, duties
and authority assigned by the Board of Supervisors.
(e) VICE CHAIRMAN. The Board of Supervisors may elect one of
its members as Vice Chairman of the Board of Supervisors. Unless the Board of
Supervisors provides otherwise, the Vice Chairman of the Board of Supervisors
shall be an Officer and shall have the powers, duties and authority of the chief
executive officer of the Partnership and, as such, shall be responsible for the
general and active management and direction of the Partnership and shall see
that all orders and resolutions of the Board of Supervisors are carried into
effect.
(f) PRESIDENT. Subject to the limitations imposed by this
Agreement, any employment agreement, any employee plan or any determination of
the Board of Supervisors, the President, subject to the direction of the Board
of Supervisors, shall have the powers, duties and authority of the chief
operating officer of the Partnership and, as such, shall be responsible for the
management and direction of the day-to-day business and affairs of the
Partnership, its other Officers, employees and agents, shall supervise generally
the affairs of the Partnership and shall have full authority to execute all
documents and take all actions that the Partnership may legally take. The
President shall exercise such other powers and perform such other duties as may
be assigned to him by this Agreement or the Board of Supervisors, including any
duties and powers stated in any employment agreement approved by the Board of
Supervisors.
(g) VICE PRESIDENTS. In the absence of the President, each
Vice President appointed by the Board of Supervisors shall have all of the
powers and duties conferred upon the President, including the same power as the
President to execute documents on behalf of the Partnership. Each such Vice
President shall perform such other duties and may exercise such other powers as
may from time to time be assigned to him by the Board of Supervisors or the
President.
(h) SECRETARY AND ASSISTANT SECRETARIES. The Secretary shall
record or cause to be recorded in books provided for that purpose the minutes of
the meetings or actions of the Board of Supervisors and of the Partners, shall
see that all notices are duly given in accordance with the provisions of this
Agreement and as required by law, shall be custodian of all records (other than
financial), shall see that the books, reports, statements, certificates and all
other documents and records required by law are properly kept and filed, and, in
general, shall perform all duties incident to the office of Secretary and such
other duties as may, from time to time, be assigned to him by this Agreement,
the Board of Supervisors or the President. The Assistant Secretaries shall
exercise the powers of the Secretary during that Officer's absence or inability
or refusal to act.
(i) TREASURER AND ASSISTANT TREASURERS. The Treasurer shall
keep or cause to be kept the books of account of the Partnership and shall
render statements of the financial affairs of the Partnership in such form and
as often as required by this Agreement, the Board of Supervisors or the
President. The Treasurer, subject to the order of the Board of Supervisors,
shall have the custody of all funds and securities of the Partnership. The
Treasurer shall perform all other duties commonly incident to his office and
shall perform such other duties and have such other powers as this Agreement,
the Board of Supervisors or the President, shall designate from time to time.
The Assistant Treasurers shall exercise the power of the Treasurer during that
Officer's absence or inability or refusal to act. Each of the Assistant
Treasurers shall possess the same power as the Treasurer to sign all
certificates, contracts, obligations and other instruments of the Partnership.
If no Treasurer or Assistant Treasurer is appointed and serving or in the
absence of the appointed Treasurer and Assistant Treasurer, the Vice President
and Chief Financial Officer, or such other Officer as the Board of Supervisors
shall select, shall have the powers and duties conferred upon the Treasurer.
(j) OTHER OFFICERS AND AGENTS. The Board of Supervisors may
appoint such other Officers and agents as may from time to time appear to be
necessary or advisable in the conduct of the affairs of the Partnership, who
shall hold their offices for such terms and shall exercise such powers and
perform such duties as shall be determined from time to time by the Board of
Supervisors.
(k) POWERS OF ATTORNEY. The Board of Supervisors may xxxxx
xxxxxx of attorney or other authority as appropriate to establish and evidence
the authority of the Officers and other Persons.
(l) OFFICERS' DELEGATION OF AUTHORITY. Unless otherwise
provided by resolution of the Board of Supervisors, no Officer shall have the
power or authority to delegate to any Person such Officer's rights and powers as
an Officer to manage the business and affairs of the Partnership.
7.8 COMPENSATION .
The Officers shall receive such compensation for their
services as may be designated by the Board of Supervisors. In addition, the
Officers shall be entitled to be reimbursed for out-of-pocket costs and expenses
incurred in the course of their service hereunder. The members of the Board of
Supervisors who are not employees of the Partnership or its Affiliates shall
receive such compensation for their services as members of the Board of
Supervisors or members of a committee of the Board of Supervisors as the Board
of Supervisors shall determine. In addition, the members of the Board of
Supervisors shall be entitled to be reimbursed for out-of-pocket costs and
expenses incurred in the course of their service hereunder.
7.9 RESTRICTIONS ON GENERAL PARTNER'S AND BOARD OF SUPERVISORS'
AUTHORITY .
(a) Except as provided in Articles XII and XIV, neither the
General Partner nor the Board of Supervisors may sell, exchange or otherwise
dispose of all or substantially all of the Partnership's assets in a single
transaction or a series of related transactions without written approval of the
specific act by the Limited Partners or by other written instrument executed and
delivered by the Limited Partners subsequent to the date of this Agreement;
PROVIDED, HOWEVER that this provision shall not preclude or limit either the
General Partner's or the Board of Supervisors' ability to mortgage, pledge,
hypothecate or grant a security interest in all or substantially all of the
assets of the Partnership Group and shall not apply to any forced sale of any or
all of the Partnership's assets pursuant to the foreclosure of, or other
realization upon, any such encumbrance.
(b) The Board of Supervisors may not cause the Partnership to
incur any Indebtedness that is recourse to the General Partner or any of its
Affiliates without the approval of the General Partner, which approval may be
given or withheld in the General Partner's sole discretion.
7.10 REIMBURSEMENT OF THE GENERAL PARTNER; EMPLOYEE BENEFIT PLANS .
(a) Except as provided in this Section 7.10 and elsewhere in
this Agreement or in the MLP Agreement, the General Partner shall not be
compensated for its services as general partner of any Group Member.
(b) The General Partner shall be reimbursed on a monthly
basis, or such other basis as the Board of Supervisors may determine, for (i)
all direct and indirect expenses it incurs or payments it makes on behalf of the
Partnership (including salary, bonus, incentive compensation and other amounts
paid to any Person to perform services for the Partnership or for the General
Partner or the Board of Supervisors in the discharge of its duties to the
Partnership) and (ii) all other necessary or appropriate expenses allocable to
the Partnership or otherwise reasonably incurred by the General Partner in
connection with operating the Partnership's business (including expenses
allocated to the General Partner by its Affiliates). Reimbursements pursuant to
this Section 7.10 shall be in addition to any reimbursement to the General
Partner as a result of indemnification pursuant to Section 7.13.
(c) The Board of Supervisors, in its sole discretion and
without the approval of the Limited Partners (who shall have no right to vote in
respect thereof), may propose and adopt on behalf of the Partnership employee
benefit plans, employee programs and employee practices for the benefit of the
members of the Board of Supervisors, employees of the Partnership, employees of
the General Partner, any Group Member or any Affiliate, or any of them, in
respect of services performed, directly or indirectly, for the benefit of the
Partnership Group. Expenses incurred by the General Partner in connection with
any such plans, programs and practices shall be reimbursed in accordance with
Section 7.10(b). Any and all obligations of the General Partner under any
employee benefit plans, employee programs or employee practices adopted by the
Board of Supervisors as permitted by this Section 7.10(c) shall constitute
obligations of the General Partner hereunder and shall be assumed by any
successor General Partner approved pursuant to Section 11.1 or 11.2 or the
transferee of or successor to all of the General Partner's Partnership Interest
as a general partner in the Partnership pursuant to Section 4.2.
7.11 OUTSIDE ACTIVITIES OF THE GENERAL PARTNER .
(a) After the Initial Closing Date, the General Partner, for
so long as it is the general partner of the Partnership, (i) agrees that its
sole business will be to act as a general partner of the Partnership and the
MLP, and any other partnership of which the Partnership or the MLP is, directly
or indirectly, a partner and to undertake activities that are ancillary or
related thereto (including being a limited partner in the MLP), and (ii) shall
not enter into or conduct any business or incur any debts or liabilities except
in connection with or incidental to (A) its performance of the activities
required or authorized by this Agreement or the MLP Agreement or described in or
contemplated by the Initial Registration Statement or the Proxy Statement and
(B) the acquisition, ownership or disposition of Partnership Interests or
partnership interests in the MLP or any other partnership of which the
Partnership or the MLP is, directly or indirectly, a partner; PROVIDED, HOWEVER,
that notwithstanding the foregoing, employees of the General Partner may perform
limited services for other Affiliates of the General Partner in addition to the
Partnership and the MLP (it being understood that full time employees of the
General Partner shall devote substantially all their employment services to the
Partnership and the MLP).
(b) Except as described in Section 7.11(a), each Indemnitee
(other than the General Partner) shall have the right to engage in businesses of
every type and description and other activities for profit and to engage in and
possess an interest in other business ventures of any and every type or
description, independently or with others, whether in the businesses engaged in
by or anticipated to be engaged in by the Partnership, the MLP, any Subsidiary
of the MLP, any Group Member or otherwise, including, without limitation, in the
case of any Affiliates of the General Partner, business interests and activities
in direct competition with the business and activities of the MLP, any
Subsidiary of the MLP or any Group Member, and none of the same shall constitute
a breach of this Agreement the MLP Agreement or any duty to the MLP, any
Subsidiary of the MLP, any Group Member or any Partner. Neither the MLP, any
Subsidiary of the MLP, any Group Member, any Limited Partner nor any other
Person shall have any rights by virtue of this Agreement, the MLP Agreement or
the partnership relationship established hereby or thereby in any business
ventures of any Indemnitee and such Indemnitees shall have no obligation to
offer any interest in any such business ventures to the MLP, any Subsidiary of
the MLP, any Group Member, any Limited Partner or any other Person. The General
Partner and any Affiliates of the General Partner may acquire Partnership
Interests, and except as otherwise provided in this Agreement, shall be entitled
to exercise all rights of a Limited Partner relating to such Partnership
Interests.
(c) Subject to the terms of Sections 7.11 (a) and (b) but
otherwise notwithstanding anything to the contrary in this Agreement, (i) the
engaging in competitive activities by any of the Indemnitees (other than the
General Partner) in accordance with Section 7.11(b) is hereby approved by the
Partnership and all Partners and (ii) it shall be deemed not to be a breach of
the General Partner's fiduciary duties or any other obligation of any type
whatsoever of the General Partner for the General Partner to permit its
Affiliates to engage, or for any such Affiliate to engage, in business interests
and activities in preference to or to the exclusion of the Partnership.
(d) The term "Affiliates" when used in this Section 7.11 with
respect to the General Partner shall not include the MLP, any Subsidiary of the
MLP, or any Group Member.
7.12 LOANS FROM THE GENERAL PARTNER; CONTRACTS WITH AFFILIATES;
CERTAIN RESTRICTIONS ON THE GENERAL PARTNER .
(a) The General Partner or any Affiliate of the General
Partner may lend to any Group Member, and any Group Member may borrow from the
General Partner and any Affiliate of the General Partner, funds needed or
desired by the Group Member, for such periods of time and in such amounts as the
General Partner may determine; PROVIDED, HOWEVER, that in any such case the
lending party may not charge the borrowing party interest at a rate greater than
the rate that would be charged the borrowing party or impose terms less
favorable on the borrowing party than would be charged or imposed on the
borrowing party by unrelated lenders on comparable loans made on an arms-length
basis (without reference to the lending party's financial abilities or
guarantees). The borrowing party shall reimburse the lending party for any costs
(other than any additional interest costs) incurred by the lending party in
connection with the borrowing of such funds. For purposes of this Section
7.12(a) and Section 7.12(b), the term "Group Member" shall include any Affiliate
of the Group Member that is controlled by the Group Member. No Group Member may
lend funds to the General Partner or any of its Affiliates; PROVIDED, HOWEVER,
that notwithstanding the foregoing, any Group Member may lend funds to the MLP,
any Subsidiary of the MLP or another Group Member.
(b) The Partnership may lend or contribute to the MLP, any
Subsidiary of the MLP, or any Group Member, and any Group Member may borrow from
the MLP, any Subsidiary of the MLP or the Partnership, funds on terms and
conditions established by the Board of Supervisors; PROVIDED, HOWEVER, that the
Partnership may not charge the MLP, any Subsidiary of the MLP or a Group Member
interest at a rate greater than the rate that would be charged to the MLP, any
Subsidiary of the MLP or such Group Member (without reference to the General
Partner's financial abilities or guarantees), by unrelated lenders on comparable
loans. The foregoing authority shall be exercised by the Board of Supervisors
and shall not create any right or benefit in favor of the MLP, any Subsidiary of
the MLP, any Group Member or any other Person.
(c) The General Partner may itself, or may enter into an
agreement with any of its Affiliates to, render services to a Group Member. Any
services rendered to a Group Member by the General Partner or any of its
Affiliates shall be on terms that are fair and reasonable to the Partnership;
PROVIDED, HOWEVER, that the requirements of this Section 7.12(c) shall be deemed
satisfied as to (i) any transaction approved by Special Approval, (ii) any
transaction, the terms of which are no less favorable to the Partnership Group
than those generally being provided to or available from unrelated third parties
or (iii) any transaction that, taking into account the totality of the
relationships between the parties involved (including other transactions that
may be particularly favorable or advantageous to the Partnership Group), is
equitable to the Partnership Group. The provisions of Section 7.10 shall apply
to the rendering of services described in this Section 7.12(c).
(d) The Partnership may transfer assets to joint ventures,
other partnerships, corporations, limited liability companies or other business
entities in which it is or thereby becomes a participant upon such terms and
subject to such conditions as are consistent with this Agreement and applicable
law.
(e) Neither the General Partner nor any of its Affiliates
shall sell, transfer or convey any property to, or purchase any property from,
the Partnership, directly or indirectly, except pursuant to transactions that
are fair and reasonable to the Partnership; PROVIDED, HOWEVER, that the
requirements of this Section 7.12(e) shall be deemed to be satisfied as to (i)
the transactions effected pursuant to Section 5.2, the Contribution and
Conveyance Agreement and any other transactions described in or contemplated by
the Initial Registration Statement or the Proxy Statement, (ii) any transaction
approved by Special Approval, (iii) any transaction, the terms of which are no
less favorable to the Partnership than those generally being provided to or
available from unrelated third parties, or (iv) any transaction that, taking
into account the totality of the relationships between the parties involved
(including other transactions that may be particularly favorable or advantageous
to the Partnership), is equitable to the Partnership.
(f) The General Partner and its Affiliates will have no
obligation to permit any Group Member to use any facilities or assets of the
General Partner and its Affiliates, except as may be provided in contracts
entered into from time to time specifically dealing with such use, nor shall
there be any obligation on the part of the General Partner or its Affiliates to
enter into such contracts.
(g) Without limitation of Sections 7.12(a) through 7.12(f),
and notwithstanding anything to the contrary in this Agreement, the existence of
the conflicts of interest described in the Initial Registration Statement or the
Proxy Statement are hereby approved by all Partners.
7.13 INDEMNIFICATION .
(a) To the fullest extent permitted by law but subject to the
limitations expressly provided in this Agreement, all Indemnitees shall be
indemnified and held harmless by the Partnership from and against any and all
losses, claims, damages, liabilities, joint or several, expenses (including
legal fees, expenses and other disbursements), judgments, fines, penalties,
interest, settlements and other amounts arising from any and all claims,
demands, actions, suits or proceedings, whether civil, criminal, administrative
or investigative, in which any Indemnitee may be involved, or is threatened to
be involved, as a party or otherwise, by reason of its status as an Indemnitee,
PROVIDED, that in each case the Indemnitee acted in good faith and in a manner
that such Indemnitee 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; PROVIDED, FURTHER, that
no indemnification pursuant to this Section 7.13 shall be available to the
Initial General Partner with respect to its obligations incurred pursuant to the
Underwriting Agreement or the Contribution and Conveyance Agreement (other than
obligations incurred by the General Partner on behalf of the Partnership or the
MLP). 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 create a presumption that the Indemnitee acted in a manner contrary to
that specified above. Any indemnification pursuant to this Section 7.13 shall be
made only out of the assets of the Partnership, it being agreed that the General
Partner shall not be personally liable for such indemnification and shall have
no obligation to contribute or loan any monies or property to the Partnership to
enable it to effectuate such indemnification.
(b) To the fullest extent permitted by law, expenses
(including legal fees, expenses and other disbursements) incurred by an
Indemnitee who is indemnified pursuant to Section 7.13(a) in defending any
claim, demand, action, suit or proceeding 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 if it shall be determined by a
final, non-appealable order of a court of competent jurisdiction that the
Indemnitee is not entitled to be indemnified as authorized in this Section 7.13.
(c) The indemnification provided by this Section 7.13 shall be
in addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to any vote of the Partners, as a matter of law or
otherwise, both as to actions in the Indemnitee's capacity as an Indemnitee and
as to actions in any other capacity (including any capacity under the
Underwriting Agreement), and shall continue as to an Indemnitee who has ceased
to serve in such capacity and shall inure to the benefit of the heirs,
successors, assigns and administrators of the Indemnitee.
(d) The Partnership may purchase and maintain (or reimburse
the members of the Board of Supervisors, the General Partner or its Affiliates
for the cost of) insurance, on behalf of the General Partner and the members of
the Board of Supervisors and such other Persons as the Board of Supervisors
shall determine, against any liability that may be asserted against or expense
that may be incurred by such Person in connection with the Partnership's
activities, regardless of whether the Partnership would have the power to
indemnify such Person against such liability under the provisions of this
Agreement.
(e) For purposes of this Section 7.13, the Partnership shall
be deemed to have requested an Indemnitee to serve as fiduciary of an employee
benefit plan whenever the performance by it of its duties to the Partnership
also imposes duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall constitute "fines" within the meaning of Section 7.13(a); and action taken
or omitted by it with respect to any employee benefit plan in the performance of
its duties for a purpose reasonably believed by it to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be for a purpose
which is in, or not opposed to, the best interests of the Partnership.
(f) In no event may an Indemnitee subject any Limited Partner
to personal liability by reason of the indemnification provisions set forth in
this Agreement.
(g) An Indemnitee shall not be denied indemnification in whole
or in part under this Section 7.13 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.
(h) The provisions of this Section 7.13 are for the benefit of
the Indemnitees, their heirs, successors, assigns and administrators and shall
not be deemed to create any rights for the benefit of any other Persons.
(i) No amendment, modification or repeal of this Section 7.13
or any provision hereof shall in any manner terminate, reduce or impair the
right of any past, present or future Indemnitee to be indemnified by the
Partnership, nor the obligations of the Partnership to indemnify any such
Indemnitee under and in accordance with the provisions of this Section 7.13 as
in effect immediately prior to such amendment, modification or repeal with
respect to claims arising from or relating to matters occurring, in whole or in
part, prior to such amendment, modification or repeal, regardless of when such
claims may arise or be asserted.
7.14 LIABILITY OF INDEMNITEES .
(a) Notwithstanding anything to the contrary set forth in this
Agreement, no Indemnitee shall be liable for monetary damages to the
Partnership, any Limited Partner or any other Persons who have acquired
interests in the Partnership, for losses sustained or liabilities incurred as a
result of errors in judgment or any act or omission if such Indemnitee acted in
good faith pursuant to authority granted in this Agreement.
(b) To the maximum extent permitted by. law, the General
Partner and its Affiliates shall not be responsible for any act or omission by
the Board of Supervisors, any member of the Board of Supervisors, or any
Officers of the Partnership.
(c) To the maximum extent permitted by law, the members of the
Board of Supervisors and the Officers of the Partnership shall not be
responsible for any act or omission by the General Partner and its Affiliates.
(d) Subject to its obligations and duties set forth in Section
7.1(a), the Board of Supervisors may exercise any of the powers granted to it by
this Agreement and perform any of the duties imposed upon it hereunder either
directly or by or through the Officers or other agents of the Partnership, and,
to the maximum extent permitted by law, the Board of Supervisors shall not be
responsible for any misconduct or negligence on the part of any such Officer or
agent appointed by the Board of Supervisors in good faith.
(e) It will not constitute a breach of fiduciary or other duty
for an Officer or member of the Board of Supervisors to engage attorneys,
accountants, engineers and other advisors on behalf of the Partnership, its
Board of Supervisors, or any committee thereof, even though such persons may
also be retained from time to time by the General Partner or any of its
Affiliates, and such persons may be engaged with respect to any matter in which
the interests of the Partnership and the General Partner or any of its
Affiliates may differ, or may be engaged by both the Partnership and the General
Partner or any of its Affiliates with respect to a matter, as long as such
Officer or member of the Board of Supervisors reasonably believes that any
conflict between the Partnership and the General Partner or any of its
Affiliates with respect to such matter is not material; and
(f) Any amendment, modification or repeal of this Section 7.14
or any provision hereof shall be prospective only and shall not in any way
affect the limitations on the liability to the Partnership and the Limited
Partner, of the General Partner, its directors, officers and employees and any
other Indemnitees under this Section 7.14 as in effect immediately prior to such
amendment, modification or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise or be asserted.
7.15 RESOLUTION OF CONFLICTS OF INTEREST .
(a) Unless otherwise expressly provided in this Agreement or
the MLP Agreement, whenever a potential conflict of interest exists or arises
between the General Partner or any of its Affiliates, or any Officer or member
of the Board of Supervisors, on the one hand, and the Partnership, the MLP, or
any Partner, on the other, any resolution or course of action in respect of such
conflict of interest shall be permitted and deemed approved by the Limited
Partners, and shall not constitute a breach of this Agreement, of the MLP
Agreement, or of any agreement contemplated herein or therein, or of any duty
stated or implied by law or equity, if the resolution or course of action is, or
by operation of this Agreement is deemed to be, fair and reasonable to the
Partnership. The Board of Supervisors shall be authorized but not required in
connection with its resolution of such conflict of interest to seek Special
Approval of a resolution of such conflict or course of action. Any conflict of
interest and any resolution of such conflict of interest shall be conclusively
deemed fair and reasonable to the Partnership if such conflict of interest or
resolution is (i) approved by Special Approval (as long as the material facts
known to the General Partner or any of its Affiliates or such Officer or member
of the Board of Supervisors regarding any proposed transaction were disclosed to
the Audit Committee at the time it gave its approval), (ii) on terms no less
favorable to the Partnership than those generally being provided to or available
from unrelated third parties or (iii) fair to the Partnership, taking into
account the totality of the relationships between the parties involved
(including other transactions that may be particularly favorable or advantageous
to the Partnership). The Board of Supervisors may also adopt a resolution or
course of action that has not received Special Approval. The Board of
Supervisors (including the Audit Committee in connection with Special Approval)
shall be authorized in connection with its determination of what is "fair and
reasonable" to the Partnership and in connection with its resolution of any
conflict of interest to consider (A) the relative interests of any party to such
conflict, agreement, transaction or situation and the benefits and burdens
relating to such interest; (B) any customary or accepted industry practices and
any customary or historical dealings with a particular Person; (C) any
applicable generally accepted accounting practices or principles; and (D) such
additional factors as the Board of Supervisors (including the Audit Committee)
determines in its discretion to be relevant, reasonable or appropriate under the
circumstances. Nothing contained in this Agreement, however, is intended to nor
shall it be construed to require the Board of Supervisors (including the Audit
Committee) to consider the interests of any Person other than the Partnership.
In the absence of bad faith by the Board of Supervisors, the resolution, action
or terms so made, taken or provided by the Board of Supervisors with respect to
such matter shall not constitute a breach of this Agreement, the MLP Agreement
or any other agreement contemplated herein or therein or a breach of any
standard of care or duty imposed herein or therein or, to the extent permitted
by law, under the Delaware Act or any other law, rule or regulation.
(b) Whenever this Agreement or any other agreement
contemplated hereby provides that the Board of Supervisors is permitted or
required to make a decision (i) in its "sole discretion," or "discretion" that
it deems "necessary or appropriate" or "necessary or advisable" or under a grant
of similar authority or latitude, except as otherwise provided herein, the Board
of Supervisors shall make such decision in its sole discretion (regardless of
whether there is a reference to "sole discretion" or "discretion") unless
another express standard is provided for or (ii) in "good faith" or under
another express standard, the Board of Supervisors shall act under such express
standard and shall not be subject to any other or different standards imposed by
this Agreement, the MLP Agreement, any other agreement contemplated hereby or
under the Delaware Act or any other law, rule or regulation. In addition, any
actions taken by the Board of Supervisors consistent with the standards of
"reasonable discretion" set forth in the definition of Available Cash shall not
constitute a breach of any duty of the Board of Supervisors to the Partnership,
the Limited Partners or any partner of the MLP. The Board of Supervisors shall
have no duty, express or implied, to sell or otherwise dispose of any asset of
the Partnership Group. No borrowing by any Group Member or the approval thereof
by the Board of Supervisors shall be deemed to constitute a breach of any duty
of the Board of Supervisors to the Partnership, the Limited Partners or any
partner of the MLP by reason of the fact that the purpose or effect of such
borrowing is directly or indirectly to enable distributions to be made to the
holders of the Incentive Distribution Rights.
(c) Whenever a particular transaction, arrangement or
resolution of a conflict of interest is required under this Agreement to be
"fair and reasonable" to any Person, the fair and reasonable nature of such
transaction, arrangement or resolution shall be considered in the context of all
similar or related transactions.
(d) The Limited Partners hereby authorize the Board of
Supervisors on behalf of the Partnership as a partner of a Group Member, to
approve of actions by the general partner or the board of supervisors of such
Group Member similar to those actions permitted to be taken by the Board of
Supervisors pursuant to this Section 7.15.
7.16 OTHER MATTERS CONCERNING THE GENERAL PARTNER AND THE BOARD OF
SUPERVISORS .
(a) The General Partner and the Board of Supervisors may rely
and shall be protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, bond, debenture or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties.
(b) The General Partner and the Board of Supervisors may
consult with legal counsel, accountants, appraisers, management consultants,
investment bankers and other consultants and advisers selected by either of
them, and any act taken or omitted to be taken in reliance upon the opinion
(including an Opinion of Counsel) of such Persons as to matters that the General
Partner or the Board of Supervisors reasonably believes to be within such
Person's professional or expert competence shall be conclusively presumed to
have been done or omitted in good faith and in accordance with such opinion.
(c) The General Partner shall have the right, in respect of
any of its powers or obligations hereunder, to act through any of its duly
authorized officers, a duly appointed attorney or attorneys-in-fact or the duly
authorized Officers of the Partnership.
(d) The Board of Supervisors shall have the right, in respect
of any of its powers or obligations hereunder, to act through any of the duly
authorized Officers of the Partnership or a duly appointed attorney or
attorneys-in-fact.
(e) Any standard of care and duty imposed by this Agreement or
under the Delaware Act or any applicable law, rule or regulation shall be
modified, waived or limited, to the maximum extent permitted by law, as required
to permit the General Partner and the Board of Supervisors to act under this
Agreement or any other agreement contemplated by this Agreement and to make any
decision pursuant to the authority prescribed in this Agreement, so long as such
action is reasonably believed by the General Partner or the Board of Supervisors
to be in, or not inconsistent with, the best interests of the Partnership.
7.17 RELIANCE BY THIRD PARTIES .
Notwithstanding anything to the contrary in this Agreement,
any Person dealing with the Partnership shall be entitled to assume that the
Board of Supervisors and any Officer of the Partnership authorized by the Board
of Supervisors to act on behalf of and in the name of the Partnership (including
the General Partner, acting pursuant to the direction of the Board of
Supervisors in accordance with Section 7.1(a)) has full power and authority to
encumber, sell or otherwise use in any manner any and all assets of the
Partnership and to enter into any contracts on behalf of the Partnership, and
such Person shall be entitled to deal with the Board of Supervisors or any such
Officer (including the General Partner, acting pursuant to the direction of the
Board of Supervisors in accordance with Section 7.1(a)) as if it were the
Partnership's sole party in interest, both legally and beneficially. The Limited
Partner hereby waives, to the maximum extent permitted by law, any and all
defenses or other remedies that may be available against such Person to contest,
negate or disaffirm any action of the Board of Supervisors or any such Officer
(including the General Partner, acting pursuant to the direction of the Board of
Supervisors in accordance with Section 7.1(a)) in connection with any such
dealing. In no event shall any Person dealing with the Board of Supervisors or
its representatives or any such Officer (including the General Partner, acting
pursuant to the direction of the Board of Supervisors in accordance with Section
7.1(a)) be obligated to ascertain that the terms of the Agreement have been
complied with or to inquire into the necessity or expedience of any act or
action of the Board of Supervisors or its representatives or any such Officer
(including the General Partner, acting pursuant to the direction of the Board of
Supervisors in accordance with Section 7.1(a)). Each and every certificate,
document or other instrument executed on behalf of the Partnership by the Board
of Supervisors or its representatives or any such Officer (including the General
Partner, acting pursuant to the direction of the Board of Supervisors in
accordance with Section 7.1 (a)) or shall be conclusive evidence in favor of any
and every Person relying thereon or claiming thereunder that (a) at the time of
the execution and delivery of such certificate, document or instrument, this
Agreement was in full force and effect, (b) the Person executing and delivering
such certificate, document or instrument was duly authorized and empowered to do
so for and on behalf of the Partnership and (c) such certificate, document or
instrument was duly executed and delivered in accordance with the terms and
provisions of this Agreement and is binding upon the Partnership.
ARTICLE VIII
BOOKS, RECORDS, ACCOUNTING AND REPORTS
8.1 RECORDS AND ACCOUNTING .
The Partnership shall keep or cause to be kept at the
principal office of the Partnership appropriate books and records with respect
to the Partnership's business, including all books and records necessary to
provide to the Limited Partners any information required to be provided pursuant
to Section 3.3(a). Any books and records maintained by or on behalf of the
Partnership in the regular course of its business, including books of account
and records of Partnership proceedings, may be kept on, or be in the form of,
computer disks, hard drives, punch cards, magnetic tape, photographs,
micrographics or any other information storage device, provided, that the books
and records so maintained are convertible into clearly legible written form
within a reasonable period of time. The books of the Partnership shall be
maintained, for financial reporting purposes, on an accrual basis in accordance
with U.S. GAAP.
8.2 FISCAL YEAR .
The fiscal year of the Partnership shall be a 52-53 week
fiscal year concluding on the Saturday nearest to September 30.
ARTICLE IX
TAX MATTERS
9.1 TAX RETURNS AND INFORMATION .
The Partnership shall timely file all returns of the
Partnership that are required for federal, state and local income tax purposes
on the basis of the accrual method and a taxable year ending on December 31. The
tax information reasonably required by the Partners for federal and state income
tax reporting purposes with respect to a taxable year shall be furnished to them
within 90 days of the close of the calendar year in which the Partnership's
taxable year ends. The classification, realization and recognition of income,
gain, losses and deductions and other items shall be on the accrual method of
accounting for federal income tax purposes.
9.2 TAX ELECTIONS .
(a) The Partnership has made the election under Section 754 of
the Code in accordance with applicable regulations thereunder, subject to the
reservation of the right to seek to revoke such election upon the Board of
Supervisors' determination that such revocation is in the best interests of the
Limited Partners.
(b) The Partnership has elected to deduct expenses incurred in
organizing the Partnership ratably over a sixty-month period as provided in
Section 709 of the Code.
(c) Except as otherwise provided herein, the Board of
Supervisors shall determine whether the Partnership should make any other
elections permitted by the Code.
9.3 TAX CONTROVERSIES .
Subject to the provisions hereof, the General Partner is
designated as the Tax Matters Partner (as defined in Section 6231(a)(7) of the
Code) and is authorized and required to represent the Partnership (at the
Partnership's expense) in connection with all examinations of the Partnership's
affairs by tax authorities, including resulting administrative and judicial
proceedings, and to expend Partnership funds for professional services and costs
associated therewith. Each Partner agrees to cooperate with the General Partner
and to do or refrain from doing any or all things reasonably required by the
General Partner to conduct such proceedings.
9.4 WITHHOLDING .
Notwithstanding any other provision of this Agreement, the
Board of Supervisors is authorized to take any action that it determines in its
discretion to be necessary or appropriate to cause the Partnership to comply
with any withholding requirements established under the Code or any other
federal, state or local law including, without limitation, pursuant to Sections
1441, 1442, 1445 and 1446 of the Code. To the extent that the Partnership is
required or elects to withhold and pay over to any taxing authority any amount
resulting from the allocation or distribution of income to any Partner
(including, without limitation, by reason of Section 1446 of the Code), the
amount withheld may be treated as a distribution of cash pursuant to Section 6.4
in the amount of such withholding from such Partner.
ARTICLE X
ADMISSION OF PARTNERS
10.1 INITIAL ADMISSION OF PARTNERS .
(a) On the Initial Closing Date, upon consummation of the
transactions contemplated by the Contribution and Conveyance Agreement, the
Initial General Partner was admitted to the Partnership as the general partner
of the Partnership and the MLP was admitted to the Partnership as a limited
partner of the Partnership.
10.2 ADMISSION OF Substituted LIMITED PARTNERS .
Any person that is the successor in interest to a Limited
Partner as described in Section 4.3 shall be admitted to the Partnership as a
Limited Partner upon (a) furnishing to the Board of Supervisors (i) acceptance
in form satisfactory to the Board of Supervisors of all of the terms and
conditions of this Agreement and (ii) such other documents or instruments as may
be required to effect its admission as a Limited Partner in the Partnership and
(b) obtaining the consent of the Board of Supervisors, which consent may be
given or withheld in the Board of Supervisors' sole discretion. Such Person
shall be admitted to the Partnership as a Limited Partner immediately prior to
the transfer of the Partnership Interest, and the business of the Partnership
shall continue without dissolution.
10.3 ADMISSION OF Successor GENERAL PARTNER .
On the date hereof and simultaneous with the Closing, the
General Partner is being admitted to the Partnership as the successor to the
Initial General Partner. A successor General Partner approved pursuant to
Section 11.1 or 11.2 or the transferee of or successor to all of the General
Partner's Partnership Interest as a general partner in the Partnership pursuant
to Section 4.2 who is proposed to be admitted as a successor General Partner
shall, subject to compliance with the terms of Section 11.3, if applicable, be
admitted to the Partnership as the General Partner, effective immediately prior
to the withdrawal or removal of the General Partner pursuant to Section 11.1 or
11.2 or the transfer of the General Partner's Partnership Interest as a general
partner in the Partnership pursuant to Section 4.2; PROVIDED, HOWEVER, that no
such successor shall be admitted to the Partnership until compliance with the
terms of Section 4.2 has occurred and such successor has executed and delivered
such other documents or instruments as may be required to effect such admission.
Any such successor shall, subject to the terms hereof, carry on the business of
the Partnership without dissolution. The admission of a successor General
Partner shall not be deemed to have affected in any manner the irrevocable
delegation of all management powers over the business and affairs of the
Partnership to the Board of Supervisors pursuant to Section 7.1(a).
10.4 ADMISSION OF ADDITIONAL LIMITED PARTNERS .
(a) A Person (other than the General Partner, the MLP or a
Substituted Limited Partner) who makes a Capital Contribution to the Partnership
in accordance with this Agreement shall be admitted to the Partnership as an
Additional Limited Partner only upon furnishing to the Board of Supervisors (i)
evidence of acceptance in form satisfactory to the Board of Supervisors of all
of the terms and conditions of this Agreement, including the granting of the
power of attorney granted in Section 2.6, and (ii) such other documents or
instruments as may be required in the discretion of the Board of Supervisors to
effect such Person's admission as an Additional Limited Partner.
(b) Notwithstanding anything to the contrary in this Section
10.4, no Person shall be admitted as an Additional Limited Partner without the
consent of the Board of Supervisors, which consent may be given or withheld in
the Board of Supervisors' discretion. The admission of any Person as an
Additional Limited Partner shall become effective on the date upon which the
name of such Person is recorded as such in the books and records of the
Partnership, following the consent of the Board of Supervisors to such
admission.
10.5 AMENDMENT OF AGREEMENT AND CERTIFICATE OF LIMITED PARTNERSHIP.
To effect the admission to the Partnership of any Partner, the
Board of Supervisors shall take all steps necessary and appropriate under the
Delaware Act to amend the records of the Partnership to reflect such admission
and, if necessary, to prepare as soon as practicable an amendment to this
Agreement and, if required by law, the General Partner shall prepare and file an
amendment to the Certificate of Limited Partnership, and the Vice Chairman and
President may for this purpose, among others, exercise the power of attorney
granted pursuant to Section 2.6.
ARTICLE XI
WITHDRAWAL OR REMOVAL OF PARTNERS
11.1 WITHDRAWAL OF THE GENERAL PARTNER .
(a) The General Partner shall be deemed to have withdrawn from
the Partnership upon the occurrence of any one of the following events (each
such event herein referred to as an "Event of Withdrawal");
(i) the General Partner voluntarily withdraws from the
Partnership (of which event the General Partner shall give written
notice to the Limited Partners);
(ii) the General Partner transfers all of its rights as
General Partner pursuant to Section 4.2;
(iii) the General Partner is removed pursuant to Section 11.2;
(iv) the general partner of the MLP withdraws from, or is
removed as the general partner of, the MLP;
(v) the General Partner (A) makes a general assignment for the
benefit of creditors; (B) files a voluntary bankruptcy petition for
relief under Chapter 7 of the United States Bankruptcy Code; (C) files
a petition or answer seeking for itself a liquidation, dissolution or
similar relief (but not a reorganization) under any law; (D) files an
answer or other pleading admitting or failing to contest the material
allegations of a petition filed against the General Partner in a
proceeding of the type described in clauses (A)-(C) of this Section
11.1(a)(v); or (E) seeks, consents to or acquiesces in the appointment
of a trustee (but not a debtor in possession), receiver or liquidator
of the General Partner or of all or any substantial part of its
properties;
(vi) a final and non-appealable order of relief under Chapter
7 of the United States Bankruptcy Code is entered by a court with
appropriate jurisdiction pursuant to a voluntary or involuntary
petition by or against the General Partner;
(vii) a certificate of dissolution or its equivalent is filed
for the General Partner, or 90 days expire after the date of notice to
the General Partner of revocation of its charter without a
reinstatement of its charter, under the laws of its state of
incorporation or formation; or
(viii) (A) in the event the General Partner is a corporation,
a certificate of dissolution or its equivalent is filed for the General
Partner, or 90 days expire after the date of notice to the General
Partner of revocation of its charter without a reinstatement of its
charter, under the laws of its state of incorporation; (B) in the event
the General Partner is a partnership or a limited liability company,
the dissolution and commencement of winding up of the General Partner;
(C) in the event the General Partner is acting in such capacity by
virtue of being a trustee of a trust, the termination of the trust; (D)
in the event the General Partner is a natural person, his death or
adjudication of incompetency; and (E) otherwise in the event of the
termination of the General Partner.
If an Event of Withdrawal specified in Section 11.1(a)(iv) (with respect to
withdrawal), (v), (vi), (vii) or (viii) (A), (B), (C) or (E) occurs, the
withdrawing General Partner shall give notice to the Limited Partners within 30
days after such occurrence. The Partners hereby agree that only the Events of
Withdrawal described in this Section 11.1 shall result in the withdrawal of the
General Partner from the Partnership.
(b) Withdrawal of the General Partner from the Partnership
upon the occurrence of an Event of Withdrawal shall not constitute a breach of
this Agreement under the following circumstances: (i) at any time during the
period beginning on the Initial Closing Date and ending at 12:00 midnight,
Eastern Standard Time, on September 30, 2006, the General Partner voluntarily
withdraws by giving at least 90 days advance notice of its intention to withdraw
to the Limited Partners; PROVIDED that prior to the effective date of such
withdrawal, the Limited Partners approve such withdrawal and the General Partner
delivers to the Partnership an Opinion of Counsel ("Withdrawal Opinion of
Counsel") that such withdrawal (following the selection of the successor General
Partner) would not result in the loss of the limited liability of any Limited
Partner or of any limited partner of the MLP, limited partner of any Group
Member or cause the MLP or the Partnership to be treated as an association
taxable as a corporation or otherwise to be taxed as an entity for federal
income tax purposes; (ii) at any time after 12:00 midnight, Eastern Standard
Time, on September 30, 2006, the General Partner voluntarily withdraws by giving
at least 90 days' advance notice to the Limited Partners, such withdrawal to
take effect on the date specified in such notice; or (iii) at any time that the
General Partner ceases to be the General Partner pursuant to Section 11.1
(a)(ii), (iii) or (iv). If the General Partner gives a notice of withdrawal
pursuant to Section 11.1 (a)(i) or Section 11.1 (a)(i) of the MLP Agreement, the
Limited Partners may, prior to the effective date of such withdrawal or removal,
elect a successor General Partner; PROVIDED, HOWEVER, that such successor shall
be the same Person, if any, that is elected by the limited partners of the MLP
pursuant to Section 11.1 of the MLP Agreement as the successor to the General
Partner in its capacity as general partner of the MLP. If, prior to the
effective date of the General Partner's withdrawal, a successor is not selected
by the Limited Partners as provided herein or the Partnership does not receive a
Withdrawal Opinion of Counsel, the Partnership shall be dissolved in accordance
with Section 12.1. Any successor General Partner elected in accordance with the
terms of this Section 11.1 shall be subject to the provisions of Section 10.3.
11.2 REMOVAL OF THE GENERAL PARTNER .
The General Partner shall be removed if such General Partner
is removed as a general partner of the MLP pursuant to Section 11.2 of the MLP
Agreement. Such removal shall be effective concurrently with the effectiveness
of the removal of such General Partner as the general partner of the MLP
pursuant to the terms of the MLP Agreement. If a successor General Partner is
elected in connection with the removal of such General Partner as a general
partner of the MLP, such successor General Partner shall, upon admission
pursuant to Article X, automatically become a successor General Partner of the
Partnership. The admission of any such successor General Partner to the
Partnership shall be subject to the provisions of Section 10.3.
11.3 INTEREST OF DEPARTING PARTNER AND SUCCESSOR GENERAL PARTNER;
DELEGATION OF AUTHORITY TO THE BOARD OF SUPERVISORS BY SUCCESSOR GENERAL PARTNER
.
(a) The Partnership Interest of a Departing Partner departing
as a result of withdrawal or removal pursuant to Section 11.1 or 11.2 shall
(unless it is otherwise required to be converted into Common Units pursuant to
Section 11.3(b) of the MLP Agreement) be purchased by the successor to the
Departing Partner for cash in the manner specified in the MLP Agreement. Such
purchase (or conversion into Common Units, as applicable) shall be a condition
to the admission to the Partnership of the successor as the General Partner. Any
successor General Partner shall indemnify the Departing General Partner as to
all debts and liabilities of the Partnership arising on or after the effective
date of the withdrawal or removal of the Departing Partner.
(b) The Departing Partner shall be entitled to receive all
reimbursements due such Departing Partner pursuant to Section 7.10, including
any employee-related liabilities (including severance liabilities), incurred in
connection with the termination of any employees employed by such Departing
Partner for the benefit of the Partnership or the other Group Members.
(c) Any successor General Partner will be deemed to have
delegated irrevocably to the Board of Supervisors all management powers over the
business and affairs of the Partnership to the same extent that the General
Partner delegated such management power to the Board of Supervisors pursuant to
Section 7.1 of this Agreement.
11.4 WITHDRAWAL OF THE LIMITED PARTNER .
Without the prior written consent of the General Partner,
which may be granted or withheld in its sole discretion, and except as provided
in Section 10.1, no Limited Partner shall have the right to withdraw from the
Partnership.
ARTICLE XII
DISSOLUTION AND LIQUIDATION
12.1 DISSOLUTION .
The Partnership shall not be dissolved by the admission of
Substituted Limited Partners or Additional Limited Partners or by the admission
of a successor General Partner in accordance with the terms of this Agreement.
Upon the removal or withdrawal of the General Partner, if a successor General
Partner is elected pursuant to Section 10.3, 11.1 or 11.2, the Partnership shall
not be dissolved and such successor General Partner shall continue the business
of the Partnership. The Partnership shall dissolve, and (subject to Section
12.2) its affairs shall be wound up, upon:
(a) the expiration of its term as provided in Section 2.7;
(b) an Event of Withdrawal of the General Partner as
provided in Section 11.1(a) (other than Section 11.1(a)(ii)), unless a successor
is elected and an Opinion of Counsel is received as provided in Section 11.1(b)
or 11.2 and such successor is admitted to the Partnership pursuant to Section
10.3;
(c) an election to dissolve the Partnership by the General
Partner that is approved by the Limited Partners;
(d) entry of a decree of judicial dissolution of the
Partnership pursuant to the provisions of the Delaware Act;
(e) the sale of all or substantially all of the assets and
properties of the Partnership Group; or
(f) the dissolution of the MLP.
12.2 CONTINUATION OF THE BUSINESS OF THE PARTNERSHIP AFTER
DISSOLUTION .
Upon (a) dissolution of the Partnership following an Event of
Withdrawal caused by the withdrawal or removal of the General Partner as
provided in Section 11.1(a)(i) or (iii) and the failure of the Limited Partners
to select a successor General Partner pursuant to Section 11.1 or 11.2, then
within 90 days thereafter or (b) dissolution of the Partnership upon an event
constituting an Event of Withdrawal as defined in Section 11.1(a)(iv), (v), (vi)
or (vii) of the MLP Agreement, then, to the maximum extent permitted by law,
within 180 days thereafter, all of the Limited Partners may elect to
reconstitute the Partnership and continue its business on the same terms and
conditions set forth in this Agreement by forming a new limited partnership on
terms identical to those set forth in this Agreement and having as the successor
general partner a Person approved by the majority of the Limited Partners. In
addition, upon dissolution of the Partnership pursuant to Section 12.1(f), if
the MLP is reconstituted pursuant to Section 13.2 of the MLP Agreement, the
reconstituted MLP may, within 180 days after such event of dissolution, as the
Limited Partners, elect to reconstitute the Partnership in accordance with the
immediately preceding sentence. Upon any such election by the Limited Partners,
all Partners shall be bound thereby and shall be deemed to have approved same.
Unless such an election is made within the applicable time period as set forth
above, the Partnership shall conduct only those activities necessary to wind up
its affairs. If such an election is so made, then:
(i) the reconstituted Partnership shall continue until the
end of the term set forth in Section 2.7 unless earlier dissolved in
accordance with this Article XII;
(ii) if the successor General Partner is not the former
General Partner, then the interest of the former General Partner shall
be purchased by the successor General Partner or converted into Common
Units of the MLP as provided in the MLP Agreement; and
(iii) all necessary steps shall be taken to cancel this
Agreement and the Certificate of Limited Partnership and to enter into
and, as necessary, to file a new partnership agreement and certificate
of limited partnership, and the successor General Partner may for this
purpose exercise the powers of attorney granted the Vice Chairman and
President pursuant to Section 2.6; PROVIDED, that the right to approve
a successor General Partner and to reconstitute and to continue the
business of the Partnership shall not exist and may not be exercised
unless the Partnership has received an Opinion of Counsel that (x) the
exercise of the right would not result in the loss of limited liability
of the Limited Partners or any limited partner of the MLP and (y)
neither the Partnership, the reconstituted limited partnership nor any
other Group Member would be treated as an association taxable as a
corporation or otherwise be taxable as an entity for federal income tax
purposes upon the exercise of such right to continue.
12.3 LIQUIDATOR .
Upon dissolution of the Partnership, unless the Partnership is
continued under an election to reconstitute and continue the Partnership
pursuant to Section 12.2, the Board of Supervisors shall select one or more
Persons to act as Liquidator. The Liquidator shall be entitled to receive such
compensation for its services as may be approved by the Limited Partners. The
Liquidator shall agree not to resign at any time without 15 days' prior notice
and may be removed at any time, with or without cause, by notice of removal
approved by the Limited Partners. Upon dissolution, removal or resignation of
the Liquidator, a successor and substitute Liquidator (who shall have and
succeed to all rights, powers and duties of the original Liquidator) shall
within 30 days thereafter be approved by the Limited Partners. The right to
approve a successor or substitute Liquidator in the manner provided herein shall
be deemed to refer also to any such successor or substitute Liquidator approved
in the manner herein provided. Except as expressly provided in this Article XII,
the Liquidator approved in the manner provided herein shall have and may
exercise, without further authorization or consent of any of the parties hereto,
all of the powers conferred upon the Board of Supervisors under the terms of
this Agreement (but subject to all of the applicable limitations, contractual
and otherwise, upon the exercise of such powers, other than the limitation on
sale set forth in Section 7.9(a)) to the extent necessary or desirable in the
good faith judgment of the Liquidator to carry out the duties and functions of
the Liquidator hereunder for and during such period of time as shall be
reasonably required in the good faith judgment of the Liquidator to complete the
winding up and liquidation of the Partnership as provided for herein.
12.4 LIQUIDATION .
The Liquidator shall proceed to dispose of the assets of the
Partnership, discharge its liabilities, and otherwise wind up its affairs in
such manner and over such period as the Liquidator determines to be in the best
interest of the Partners, subject to Section 17-804 of the Delaware Act and the
following:
(a) DISPOSITION OF ASSETS. The assets may be disposed of by
public or private sale or by distribution in kind to one or more Partners on
such terms as the Liquidator and such Partner or Partners may agree. If any
property is distributed in kind, the Partner receiving the property shall be
deemed for purposes of Section 12.4(c) to have received cash equal to its fair
market value; and contemporaneously therewith, appropriate cash distributions
must be made to the other Partners. Under certain circumstances and subject to
certain limitations, the Liquidator may defer liquidation or distribution of the
Partnership's assets for a reasonable time or distribute assets to the Partners
in kind if it determines that a sale would be impractical or would cause undue
loss to the Partners.
(b) DISCHARGE OF LIABILITIES. Liabilities of the Partnership
include amounts owed to Partners otherwise than in respect of their distribution
rights under Article VI. With respect to any liability that is contingent or is
otherwise not yet due and payable, the Liquidator shall either settle such claim
for such amount as it thinks appropriate or establish a reserve of cash or other
assets to provide for its payment. When paid, any unused portion of the reserve
shall be distributed as additional liquidation proceeds.
(c) LIQUIDATION DISTRIBUTIONS. All property and all cash in
excess of that required to discharge liabilities as provided in Section 12.4(b)
shall be distributed to the Partners in accordance with, and to the extent of,
the positive balances in their respective Capital Accounts, as determined after
taking into account all Capital Account adjustments (other than those made by
reason of distributions pursuant to this Section 12.4(c)) for the taxable year
of the Partnership during which the liquidation of the Partnership occurs (with
such date of occurrence being determined pursuant to Treasury Regulation,
Section 1.704-1(b)(2)(ii)(g)), and such distribution shall be made by the end of
such taxable year (or, if later, within 90 days after said date of such
occurrence).
12.5 CANCELLATION OF CERTIFICATE OF LIMITED PARTNERSHIP .
Upon the completion of the distribution of Partnership cash
and property as provided in Section 12.4 in connection with the liquidation of
the Partnership, the Partnership shall be terminated and the Certificate of
Limited Partnership and all qualifications of the Partnership as a foreign
limited partnership in jurisdictions other than the State of Delaware shall be
canceled and such other actions as may be necessary to terminate the Partnership
shall be taken.
12.6 RETURN OF CAPITAL CONTRIBUTIONS .
The General Partner shall not be personally liable for, and
shall have no obligation to contribute or loan any monies or property to the
Partnership to enable it to effectuate, the return of the Capital Contributions
of any Limited Partner, or any portion thereof, it being expressly understood
that any such return shall be made solely from Partnership assets.
12.7 WAIVER OF PARTITION .
To the maximum extent permitted by law, each Partner hereby
waives any right to partition of the Partnership property.
12.8 CAPITAL ACCOUNT RESTORATION .
No Limited Partner shall have any obligation to restore any
negative balance in its Capital Account upon liquidation of the Partnership. The
General Partner shall be obligated to restore any negative balance in its
Capital Account upon liquidation of its interest in the Partnership by the end
of the taxable year of the Partnership during which such liquidation occurs, or,
if later, within 90 days after the date of such liquidation.
ARTICLE XIII
AMENDMENT OF PARTNERSHIP AGREEMENT
13.1 AMENDMENT TO BE ADOPTED SOLELY BY THE BOARD OF SUPERVISORS .
The Limited Partners agree that the Board of Supervisors,
without the approval of the Limited Partners, may amend any provision of this
Agreement, and may authorize any Officer (pursuant to the powers of attorney
granted in Section 2.6) to execute, swear to, acknowledge, deliver, file and
record whatever documents may be required in connection therewith, to reflect:
(a) a change in the name of the Partnership, the location of
the principal place of business of the Partnership, the registered agent of the
Partnership or the registered office of the Partnership;
(b) admission, substitution, withdrawal or removal of
Partners in accordance with this Agreement;
(c) a change that, in the discretion of the Board of
Supervisors, is necessary or advisable to qualify or continue the qualification
of the Partnership as a limited partnership or a partnership in which the
Limited Partners have limited liability under the laws of any state or to ensure
that neither the Partnership nor the MLP will be treated as an association
taxable as a corporation or otherwise be taxed as an entity for federal income
tax purposes;
(d) a change that, in the discretion of the Board of
Supervisors, (i) does not adversely affect the Limited Partners in any material
respect, (ii) is necessary or advisable to satisfy any requirements, conditions
or guidelines contained in any opinion, directive, order, ruling or regulation
of any federal or state agency or judicial authority or contained in any federal
or state statute (including the Delaware Act), compliance with any of which the
Board of Supervisors determines in its discretion to be in the best interests of
the Partnership and the Limited Partners, (iii) is required to effect the intent
expressed in the Initial Registration Statement or the Proxy Statement or the
intent of the provisions of this Agreement or is otherwise contemplated by this
Agreement or (iv) is required to conform the provisions of this Agreement with
the provisions of the MLP Agreement as the provisions of the MLP Agreement may
be amended, supplemented or restated from time to time.
(e) a change in the fiscal year or taxable year of the
Partnership and any changes that, in the discretion of the Board of Supervisors,
are necessary or advisable as a result of a change in the fiscal year or taxable
year of the Partnership including, if the Board of Supervisors shall so
determine, a change in the definition of "Quarter" and the dates on which
distributions are to be made by the Partnership;
(f) an amendment that is necessary, in the Opinion of
Counsel, to prevent the Partnership or the members of the Board of Supervisors
or the Officers, or the General Partner or its directors, officers, trustees or
agents from in any manner being subjected to the provisions of the Investment
Company Act of 1940, as amended, the Investment Advisers Act of 1940, as
amended, or "plan asset" regulations adopted under the Employee Retirement
Income Security Act of 1974, as amended, regardless of whether such are
substantially similar to plan asset regulations currently applied or proposed by
the United States Department of Labor;
(g) any amendment expressly permitted in this Agreement to
be made by the Board of Supervisors acting alone;
(h) an amendment effected, necessitated or contemplated by a
Merger Agreement approved in accordance with Section 14.3;
(i) an amendment that, in the discretion of the Board of
Supervisors, is necessary or advisable to reflect, account for and deal with
appropriately the formation by the Partnership of, or investment by the
Partnership in, any corporation, partnership, joint venture, limited liability
company or other entity in connection with the conduct by the Partnership of
activities permitted by the terms of Section 2.4;
(j) an amendment that, in the discretion of the Board of
Supervisors, is necessary or advisable to effect or continue the irrevocable
delegation by the General Partner to the Board of Supervisors of all management
powers over the business and affairs of the Partnership; or
(k) any other amendments substantially similar to the
foregoing.
13.2 AMENDMENT PROCEDURES .
Except with respect to amendments of the type described in
Section 13.1, all amendments to this Agreement shall be made in accordance with
the following requirements. Amendments to this Agreement may be proposed only by
or with the consent of the Board of Supervisors. A proposed amendment shall be
effective upon its approval by all of the Limited Partners.
ARTICLE XIV
MERGER
14.1 AUTHORITY .
The Partnership may merge or consolidate with one or more
corporations, business trusts or associations, real estate investment trusts,
common law trusts or unincorporated businesses, including a general partnership,
limited partnership, limited liability company or limited liability partnership
formed under the laws of the State of Delaware or any other state of the United
States of America, pursuant to a written agreement of merger or consolidation
("Merger Agreement") in accordance with this Article XIV.
14.2 PROCEDURE FOR MERGER OR CONSOLIDATION .
Merger or consolidation of the Partnership pursuant to this
Article XIV requires the prior approval of the Board of Supervisors. If the
Board of Supervisors shall determine, in the exercise of its discretion, to
consent to the merger or consolidation, the Board of Supervisors shall approve
the Merger Agreement, which shall set forth:
(a) The names and jurisdictions of formation or organization
of each of the business entities proposing to merge or consolidate;
(b) The name and jurisdictions of formation or organization
of the business entity that is to survive the proposed merger or consolidation
(the "Surviving Business Entity");
(c) The terms and conditions of the proposed merger or
consolidation;
(d) The manner and basis of exchanging or converting the
equity securities of each constituent business entity for, or into, cash,
property or general or limited partner interests, rights, securities or
obligations of the Surviving Business Entity; and (i) if any general or limited
partner interests, securities or rights of any constituent business entity are
not to be exchanged or converted solely for, or into, cash, property or general
or limited partner interests, rights, securities or obligations of the Surviving
Business Entity, the cash, property or general or limited partner interests,
rights, securities or obligations of any limited partnership, corporation, trust
or other entity (other than the Surviving Business Entity) which the holders of
such general or limited partner interests, securities or rights are to receive
in exchange for, or upon conversion of their general or limited partner
interests, securities or rights, and (ii) in the case of securities represented
by certificates, upon the surrender of such certificates, which cash, property
or general or limited partner interests, rights, securities or obligations of
the Surviving Business Entity or any general or limited partnership,
corporation, trust or other entity (other than the Surviving Business Entity),
or evidences thereof, are to be delivered;
(e) A statement of any changes in the constituent documents
or the adoption of new constituent documents (the articles or certificate of
incorporation, articles of trust, declaration of trust, certificate or agreement
of limited partnership, certificate of formation or agreement of limited
liability company or other similar charter or governing document) of the
Surviving Business Entity to be effected by such merger or consolidation;
(f) The effective time of the merger, which may be the date
of the filing of the certificate of merger pursuant to Section 14.4 or a later
date specified in or determinable in accordance with the Merger Agreement
(provided, that if the effective time of the merger is to be later than the
date of the filing of the certificate of merger, the effective time shall be
filed no later than the time of the filing of the certificate of merger and
stated therein); and
(g) Such other provisions with respect to the proposed
merger or consolidation as are deemed necessary or appropriate by the Board of
Supervisors.
14.3 APPROVAL BY LIMITED PARTNERS OF MERGER OR CONSOLIDATION .
(a) The Board of Supervisors, upon its approval of the
Merger Agreement, shall direct that the Merger Agreement be submitted to the
Limited Partners for their approval.
(b) The Merger Agreement shall be approved upon receiving
the approval of all of the Limited Partners.
(c) After such approval by the Limited Partners, and at any
time prior to the filing of the certificate of merger pursuant to Section 14.4,
the merger or consolidation may be abandoned pursuant to provisions therefor, if
any, set forth in the Merger Agreement.
14.4 CERTIFICATE OF MERGER .
Upon the required approval by the Board of Supervisors and the
Limited Partners of a Merger Agreement, a certificate of merger shall be
executed and filed with the Secretary of State of the State of Delaware in
conformity with the requirements of the Delaware Act.
14.5 EFFECT OF MERGER .
(a) At the effective time of the certificate of merger:
(i) all of the rights, privileges and powers of
each of the business entities that has merged or consolidated, and all
property, real, personal and mixed, and all debts due to any of those
business entities and all other things and causes of action belonging
to each of those business entities shall be vested in the Surviving
Business Entity and after the merger or consolidation shall be the
property of the Surviving Business Entity to the extent they were of
each constituent business entity;
(ii) the title to any real property vested by deed
or otherwise in any of those constituent business entities shall not
revert and is not in any way impaired because of the merger or
consolidation;
(iii) all rights of creditors and all liens on or
security interests in property of any of those constituent business
entities shall be preserved unimpaired; and
(iv) all debts, liabilities and duties of those
constituent business entities shall attach to the Surviving Business
Entity, and may be enforced against it to the same extent as if the
debts, liabilities and duties had been incurred or contracted by it.
(b) A merger or consolidation effected pursuant to this
Article XIV shall not be deemed to result in a transfer or assignment of assets
or liabilities from one entity to another.
ARTICLE XV
GENERAL PROVISIONS
15.1 ADDRESSES AND NOTICES .
Any notice, demand, request, report or proxy materials
required or permitted to be given or made to a Partner under this Agreement
shall be in writing and shall be deemed given or made when received by it at the
principal office of the Partnership referred to in Section 2.3.
15.2 REFERENCES .
Except as specifically provided as otherwise, references to
"Articles" and "Sections" are to Articles and Sections of this Agreement.
15.3 FURTHER ACTION .
The parties shall execute and deliver all documents, provide
all information and take or refrain from taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.
15.4 BINDING EFFECT .
This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their heirs, executors, administrators, successors,
legal representatives and permitted assigns.
15.5 INTEGRATION .
This Agreement constitutes the entire agreement among the
parties hereto pertaining to the subject matter hereof and supersedes all prior
agreements and understandings pertaining thereto.
15.6 CREDITORS .
None of the provisions of this Agreement shall be for the
benefit of, or shall be enforceable by, any creditor of the Partnership.
15.7 WAIVER .
No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach of any other covenant, duty, agreement or condition.
15.8 COUNTERPARTS .
This Agreement may be executed in counterparts, all of which
together shall constitute an agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart. Each party shall become bound by this Agreement immediately
upon affixing its signature hereto, independently of the signature of any other
party.
15.9 APPLICABLE LAW .
This Agreement shall be construed in accordance with and
governed by the laws of the State of Delaware, without regard to the principles
of conflicts of law.
15.10 INVALIDITY OF PROVISIONS .
If any provision of this Agreement is or becomes invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not be
affected thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
GENERAL PARTNER:
SUBURBAN ENERGY SERVICES GROUP LLC
By:
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Name: Xxxx X. Xxxxxxxxx
Title: [Authorized Person]
LIMITED PARTNER:
SUBURBAN PROPANE PARTNERS, L.P.
By:
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Name:
Title:
