AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF ENTERPRISE LOU-TEX PROPYLENE PIPELINE L.P.
Exhibit 10.16
Execution Copy
AMENDED AND RESTATED
OF
ENTERPRISE XXX-XXX PROPYLENE PIPELINE L.P.
TABLE OF CONTENTS
| ARTICLE I: DEFINITIONS | ||||||
1.01
|
Certain Definitions | 2 | ||||
1.02
|
Other Definitions | 4 | ||||
1.03
|
Construction | 4 | ||||
| ARTICLE II: ORGANIZATION | ||||||
2.01
|
Formation and Continuation | 4 | ||||
2.02
|
Name | 4 | ||||
2.03
|
Offices | 4 | ||||
2.04
|
Purposes | 4 | ||||
2.05
|
Certificate; Foreign Qualification | 5 | ||||
2.06
|
Term | 5 | ||||
2.07
|
Merger | 5 | ||||
| ARTICLE III: PARTNERS AND PARTNERSHIP INTERESTS | ||||||
3.01
|
Partners | 5 | ||||
3.02
|
No Dispositions of Partnership Interests | 5 | ||||
3.03
|
Additional Partnership Interests | 5 | ||||
| ARTICLE IV: CAPITAL CONTRIBUTIONS | ||||||
4.01
|
Initial Contributions | 6 | ||||
4.02
|
Subsequent Contributions | 6 | ||||
4.03
|
Advances by Partners | 6 | ||||
4.04
|
Capital Accounts | 6 | ||||
| ARTICLE V: ALLOCATIONS AND DISTRIBUTIONS | ||||||
5.01
|
Allocations | 7 | ||||
5.02
|
Distributions | 9 | ||||
| ARTICLE VI: MANAGEMENT AND OPERATION | ||||||
6.01
|
Management of Partnership Affairs | 9 | ||||
6.02
|
Compensation | 9 | ||||
6.03
|
Standards and Conflicts | 9 | ||||
6.04
|
Indemnification | 10 | ||||
6.05
|
Power of Attorney | 10 | ||||
| ARTICLE VII: RIGHTS OF LIMITED PARTNERS | ||||||
7.01
|
Information | 10 | ||||
7.02
|
Withdrawal | 11 | ||||
7.03
|
Consents and Voting | 11 |
i
7.04
|
Meetings | 11 | ||||
| ARTICLE VIII: TAXES | ||||||
8.01
|
Tax Returns | 12 | ||||
8.02
|
Tax Elections | 12 | ||||
8.03
|
Tax Matters Partner | 12 | ||||
| ARTICLE IX: BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS | ||||||
9.01
|
Maintenance of Books | 12 | ||||
9.02
|
Reports | 13 | ||||
9.03
|
Accounts | 13 | ||||
| ARTICLE X: WITHDRAWAL, BANKRUPTCY, ETC. OF GENERAL PARTNER | ||||||
10.01
|
Withdrawal, Bankruptcy, Etc. of General Partner | 13 | ||||
10.02
|
Conversion of Interest | 14 | ||||
| ARTICLE XI: DISSOLUTION, LIQUIDATION, AND TERMINATION | ||||||
11.01
|
Dissolution | 14 | ||||
11.02
|
Liquidation and Termination | 14 | ||||
11.03
|
Termination | 16 | ||||
| ARTICLE XII: GENERAL PROVISIONS | ||||||
12.01
|
Offset | 16 | ||||
12.02
|
Notices | 16 | ||||
12.03
|
Entire Agreement; Supersedure | 16 | ||||
12.04
|
Effect of Waiver or Consent | 16 | ||||
12.05
|
Amendment or Modification | 16 | ||||
12.06
|
Binding Effect | 16 | ||||
12.07
|
Governing Law; Severability | 17 | ||||
12.08
|
Further Assurances | 17 | ||||
12.09
|
Waiver of Certain Rights | 17 | ||||
12.10
|
Indemnification | 17 | ||||
12.11
|
Counterparts | 17 |
EXHIBITS:
| A Names, Addresses and Sharing Ratios of Partners |
ii
This AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF ENTERPRISE XXX-XXX PROPYLENE
PIPELINE L.P., a Texas limited partnership (the “Partnership”) is made and entered into as of
February 5, 2007, (the “Effective Date”) by and among the Partners (as defined below).
WHEREAS, the Partnership was formed under the laws of the State of Texas by the Original
General Partner’s filing with the Secretary of State of Texas on August 25, 1999 an Original
Certificate of Limited Partnership and the execution by the Original General Partner and Original
Limited Partner of an Agreement of Limited Partnership (as amended to date, the “Original
Agreement”) effective as of August 25, 1999 (the “Organization Date”);
1
1.01 Certain Definitions. As used in this Agreement, the following terms have the following
meanings:
“Act” means the Texas Revised Limited Partnership Act and any successor statute, as
amended from time to time.
“Agreement” means this Amended and Restated Agreement of Limited Partnership of
Enterprise Xxx-Xxx Propylene Pipeline L.P., as it may be amended, modified or supplemented
in accordance with the provisions below.
“Allocation Regulations” means Treas. Reg. §§ 1.704-1(b), 1.704-2 and 1.703-3
(including any temporary regulations) as such regulations may be amended and in effect from
time to time and any corresponding provision of succeeding regulations.
“Bankrupt Partner” means any Partner (whether the General Partner or a Limited
Partner) with respect to which an event of the type described in Section 4.02(a)(4) or (5)
of the Act has occurred, subject to the lapsing of any period of time therein specified.
“Business Day” means any day other than a Saturday, a Sunday, or a holiday on which
banks in the State of Texas generally are closed.
“Capital Contribution” means any contribution by a Partner to the capital of the
Partnership.
“Carrying Value” means (a) with respect to property contributed to the Partnership,
the fair market value of such property at the time of contribution reduced (but not below
zero) by all depreciation, depletion (computed as a separate item of deduction),
amortization and cost recovery deductions charged to the Partners’ capital accounts, (b)
with respect to any property whose value is adjusted pursuant to the Allocation
Regulations, the adjusted value of such property reduced (but not below zero) by all
depreciation and cost recovery deductions charged to the Partners’ capital accounts and (c)
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.
“Certificate” means the Certificate of Amendment of Certificate of Limited Partnership
of the Partnership, as filed with the Secretary of State of the State of Texas on February
5, 2007, and as amended or restated from time to time.
“Code” means the Internal Revenue Code of 1986 and any successor statute, as amended
from time to time.
“Contribution Agreement” has the meaning set forth in the recitals.
“DEP OLP” means DEP Operating Partnership, L.P., a Delaware limited partnership.
2
“Dispose” or “Disposition” means a sale, assignment, transfer, exchange, mortgage,
pledge, grant of a security interest, or other disposition or encumbrance, or the acts of
the foregoing.
“Effective Date” has the meaning set forth in the first paragraph of this Agreement.
“EPD OLP” means Enterprise Products Operating L.P., a Delaware limited partnership.
“General Partner” means (a) DEP OLP or (b) any other Person subsequently admitted to
the Partnership as the general partner as provided in this Agreement, but does not include
any Person who has ceased to be the general partner in the Partnership.
“GP Interest” has the meaning set forth in the recitals.
“Limited Partner” means EPD OLP, PPP or any other Person subsequently admitted to the
Partnership as a limited partner as provided in this Agreement, but does not include any
Person who has ceased to be a limited partner in the Partnership.
“MLP” has the meaning set forth in the recitals.
“Omnibus Agreement” means the Omnibus Agreement between EPD OLP, DEP Holdings, LLC,
MLP, DEP OLPGP, LLC, DEP OLP, Enterprise Xxx-Xxx Propylene Pipeline L.P., Acadian Gas, LLC,
Mont Belvieu Caverns, LLC, South Texas NGL Pipelines, LLC and the Partnership, dated
February 5, 2007, as amended or restated from time to time.
“Original Agreement” means the Agreement of Limited Partnership of the Partnership as
of the Organization Date.
“Organization Date” has the meaning given that term in the recitals.
“Original Certificate” means the Certificate of Limited Partnership as filed with the
Secretary of State of the State of Texas on August 25, 1999.
“Original General Partner” means EPD OLP.
“Original Limited Partner” means PPP.
“Partner” means the General Partner or any Limited Partner.
“Partnership” has the meaning given that term in the first paragraph.
“Partnership Interest” means the interest of a Partner in the Partnership, including,
without limitation, rights to distributions (liquidating or otherwise), allocations,
information, and to consent or approve.
3
“Person” means an individual or a corporation, firm, limited liability company,
partnership, joint venture, unincorporated organization, association, government agency or
political subdivision thereof or other entity.
“PPP” means Propylene Pipeline Partnership, L.P., a Texas limited partnership.
“Required Interest” means one or more Limited Partners having among them more than 50%
of the Sharing Ratios of all Limited Partners in their capacities as such.
“Sharing Ratio” means (a) in the case of a Partner executing this Agreement as of the
date of this Agreement, the percentage specified for that Partner as its Sharing Ratio on
Exhibit A, and (b) in the case of a Partnership Interest issued under Section 10.01(c) or
10.02, the Sharing Ratio established in that provision.
1.02 Other Definitions. Other terms defined in this Agreement have the meanings so given
them.
1.03 Construction. Whenever the context requires, the gender of all words used in this
Agreement includes the masculine, feminine, and neuter. All references to Articles and Sections
refer to articles and sections of this Agreement, and all references to Exhibits are to Exhibits
attached to this Agreement, each of which is made a part of this Agreement for all purposes.
2.01 Formation and Continuation. The Partnership has been previously formed as a limited
partnership pursuant to the provisions of the Act. The General Partner and the Limited Partners
hereby amend and restate in its entirety the Original Agreement. Subject to the provisions of this
Agreement, the General Partner and the Limited Partners hereby continue the Partnership as a
limited partnership pursuant to the provisions of the Act. This amendment and restatement shall
become effective on the date of this Agreement.
2.02 Name. The name of the Partnership is “Enterprise Xxx-Xxx Propylene Pipeline L.P.” and
all Partnership business must be conducted in that name or such other names that comply with
applicable law as the General Partner may select from time to time.
2.03 Offices. The registered office of the Partnership in the State of Texas shall be at such
place as the General Partner may designate from time to time. The registered agent for service of
process on the Partnership in the State of Texas or any other jurisdiction shall be such Person or
Persons as the General Partner may designate from time to time. The principal office of the
Partnership in the United States shall be at such place as the General Partner may designate from
time to time, which need not be in the State of Texas, and the Partnership shall maintain records
there as required by the Act. The Partnership may have such other offices as the General Partner
may designate from time to time.
2.04 Purposes. The purposes of the Partnership are to engage in any business or activity that
now or in the future may be necessary, incidental, proper, advisable, or convenient to accomplish
the foregoing purpose (including, without limitation, obtaining appropriate
4
financing) and that is not forbidden by the law of the jurisdiction in which the Partnership
engages in that business.
2.05 Certificate; Foreign Qualification. The General Partner has executed and caused to be
filed with the Secretary of State of Texas a Certificate, amending the Original Certificate filed
on August 25, 1999 and containing information required by the Act. Prior to the Partnership’s
conducting business in any jurisdiction other than Texas, the General Partner shall cause the
Partnership to comply, to the extent those matters are reasonably within the control of the General
Partner, with all requirements necessary to qualify the Partnership as a foreign limited
partnership (or a partnership in which the Limited Partners have limited liability) in that
jurisdiction. At the request of the General Partner, each Limited Partner shall execute,
acknowledge, swear to, and deliver all certificates and other instruments conforming with this
Agreement that are necessary or appropriate to form, qualify, continue, and terminate the
Partnership as a limited partnership under the law of the State of Texas and to qualify, continue,
and terminate the Partnership as a foreign limited partnership (or a partnership in which the
Limited Partners have limited liability) in all other jurisdictions in which the Partnership may
conduct business, and to this end the General Partner may use the power of attorney described in
Section 6.05.
2.06 Term. The Partnership commenced on August 25, 1999, when the Original Certificate first
was properly filed with the Secretary of State of Texas and shall continue in existence until its
business and affairs are wound up following dissolution automatically at the close of Partnership
business on December 31, 2050 unless (i) the Partners unanimously agree to extend the term of the
Partnership for a longer duration or (ii) the Partnership is earlier dissolved pursuant to the
provisions hereof.
2.07 Merger. The Partnership may engage in mergers, but only with the unanimous consent of
the Partners.
3.01 Partners. The general partner is DEP OLP, which is admitted to the Partnership as a
general partner effective with the filing of the Certificate with the Secretary of State of the
State of Texas. The limited partners are EPD OLP, which is admitted to the Partnership as a limited
partner effective with the filing of the Certificate with the Secretary of State of the State of
Texas and PPP, which was admitted to the Partnership as a limited partner effective with the
commencement of the Partnership.
3.02 No Dispositions of Partnership Interests. Except as set forth in Article 4 of the
Omnibus Agreement, the Partnership Interests may not be Disposed of, and any purported Disposition
of the Partnership Interests shall be null and void.
3.03 Additional Partnership Interests. Additional Partnership Interests may be created and
issued to new or existing Partners only in compliance with the provisions in Article 5 of the
Omnibus Agreement. The Partnership shall be bound by the terms of such Omnibus Agreement.
5
4.01 Initial Contributions. The Partners have previously contributed (whether through actual
contributions or as a result of their acquisition of their Partnership Interests from MLP) to the
Partnership those assets which are currently listed as assets of the Partnership on the
Partnership’s books and records.
4.02 Subsequent Contributions. Additional Capital Contributions shall be made only with the
unanimous consent of the Partners.
4.03 Advances by Partners. If the Partnership does not have sufficient cash to pay its
obligations, the General Partner, or any Limited Partner(s) that may agree to do so with the
General Partner’s consent, may advance all or part of the needed funds to or on behalf of the
Partnership. Payment by the General Partner on account of liability as a matter of law for
Partnership obligations is deemed to be an advance under this Section 4.03. An advance described in
this Section 4.03 constitutes a loan from the Partner to the Partnership, bears interest at a rate
determined by the General Partner (and, if applicable, the Limited Partner making the advance) from
the date of the advance until the date of payment, and is not a Capital Contribution.
4.04 Capital Accounts. A capital account shall be established and maintained for each
Partner. Each Partner’s capital account (a) shall be increased by (i) the amount of money
contributed by that Partner to the Partnership, (ii) the fair market value of property contributed
by that Partner to the Partnership (net of liabilities secured by the contributed property that the
Partnership is considered to assume or take subject to under section 752 of the Code), and (iii)
allocations to that Partner of Partnership income and gain (or items of income and gain), including
income and gain exempt from tax and income and gain described in Treas. Reg. §
1.704-1(b)(2)(iv)(g), but excluding income and gain described in Treas. Reg. § 1.704-1(b)(4)(i),
and (b) shall be decreased by (i) the amount of money distributed to that Partner by the
Partnership, (ii) the fair market value of property distributed to that Partner by the Partnership
(net of liabilities secured by the distributed property that the Partner is considered to assume or
take subject to under section 752 of the Code), (iii) allocations to that Partner of expenditures
of the Partnership described in section 705(a)(2)(B) of the Code, and (iv) allocations of
Partnership loss and deduction (or items of loss and deduction), including loss and deduction
described in Treas. Reg. § 1.704-1(b)(2)(iv)(g), but excluding items described in clause (b)(iii)
above and loss or deduction described in Treas. Reg. § 1.704-1(b)(4)(i) or § 1.704-1(b)(4)(iii).
The Partners’ capital accounts also shall be maintained and adjusted as permitted by the provisions
of Treas. Reg. § 1.704-1(b)(2)(iv)(f) and as required by the other provisions of Treas. Reg. §§
1.704-1(b)(2)(iv) and 1.704-1(b)(4), including adjustments to reflect the allocations to the
Partners of depreciation, depletion, amortization, and gain or loss as computed for book purposes
rather than the allocation of the corresponding items as computed for tax purposes, as required by
Treas. Reg. § 1.704-1(b)(2)(iv)(g). A Partner that has more than one Partnership Interest shall
have a single capital account that reflects all its Partnership Interests, regardless of the class
of Partnership Interests owned by that Partner and regardless of the time or manner in which those
Partnership Interests were acquired.
6
5.01 Allocations.
(a) Except as otherwise set forth in Section 5.01(b), for purposes of maintaining the capital
accounts and in determining the rights of the Partners among themselves, all items of income, gain,
loss, deduction, and credit of the Partnership shall be allocated among the Partners in accordance
with their Sharing Ratios.
(b) The following special allocations shall be made prior to making any allocations provided
for in 5.01(a) above:
(i) Minimum Gain Chargeback. Notwithstanding any other provision hereof to the
contrary, if there is a net decrease in Minimum Gain (as generally defined under
Treas. Reg. § 1.704-1 or § 1.704-2) for a taxable year (or if there was a net
decrease in Minimum Gain for a prior taxable year and the Partnership did not have
sufficient amounts of income and gain during prior years to allocate among the
Partners under this subsection 5.01(b)(i), then items of income and gain shall be
allocated to each Partner in an amount equal to such Partner’s share of the net
decrease in such Minimum Gain (as determined pursuant to Treas. Reg. §
1.704-2(g)(2)). It is the intent of the Partners that any allocation pursuant to
this subsection 5.01(b)(i) shall constitute a “minimum gain chargeback” under Treas.
Reg. § 1.704-2(f) and shall be interpreted consistently therewith.
(ii) Partner Nonrecourse Debt Minimum Gain Chargeback. Notwithstanding any
other provision of this Article 5, except subsection 5.01(b)(i), if there is a net
decrease in Partner Nonrecourse Debt Minimum Gain (as generally defined under Treas.
Reg. § 1.704-1 or § 1.704-2), during any taxable year, any Partner who has a share
of the Partner Nonrecourse Debt Minimum Gain shall be allocated such amount of
income and gain for such year (and subsequent years, if necessary) determined in the
manner required by Treas. Reg. § 1.704-2(i)(4) as is necessary to meet the
requirements for a chargeback of Partner Nonrecourse Debt Minimum Gain.
(iii) Qualified Income Offset. Except as provided in subsection 5.01(b)(i) and
(ii) hereof, in the event any Partner unexpectedly receives any adjustments,
allocations or distributions described in Treas. Reg. Sections
1.704-1(b)(2)(i)(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 specifically allocated to such Partner in an
amount and manner sufficient to eliminate, to the extent required by the Allocation
Regulations, the deficit balance, if any, in its adjusted capital account created by
such adjustments, allocations or distributions as quickly as possible.
(iv) Gross Income Allocations. In the event any Partner has a deficit balance
in its adjusted capital account at the end of any Partnership taxable period, 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
7
allocation pursuant to this subsection 5.01(b)(iv) shall be made only if and to
the extent that such Partner would have a deficit balance in its adjusted capital
account after all other allocations provided in this Section 5.01 have been
tentatively made as if subsection 5.01(b)(iv) were not in the Agreement.
(v) Partnership Nonrecourse Deductions. Partnership Nonrecourse Deductions (as
determined under Treas. Reg. Section 1.704-2(c)) for any fiscal year shall be
allocated among the Partners in proportion to their Partnership Interests.
(vi) Partner Nonrecourse Deductions. Any Partner Nonrecourse Deductions (as
defined under Treas. Reg. Section 1.704-2(i)(2)) shall be allocated pursuant to
Treas. Reg. Section 1.704-2(i) to the Partner who bears the economic risk of loss
with respect to the partner nonrecourse debt to which it is attributable.
(vii) Code Section 754 Adjustment. 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 the Allocation Regulations, 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 the
Allocation Regulations.
(viii) Curative Allocation. The special allocations set forth in subsections
5.01(b)(i)-(vi) (the “Regulatory Allocations”) are intended to comply with the
Allocation Regulations. Notwithstanding any other provisions of this Section 5.01,
the Regulatory Allocations shall be taken into account in allocating items of
income, gain, loss and deduction among the Partners such that, to the extent
possible, the net amount of allocations of such items and the Regulatory Allocations
to each Partner shall be equal to the net amount that would have been allocated to
each Partner if the Regulatory Allocations had not occurred.
(c) For federal income tax purposes, except as otherwise required by the Code, the Allocation
Regulations or the following sentence, each item of Partnership income, gain, loss, deduction and
credit shall be allocated among the Partners in the same manner as corresponding items are
allocated in Section 5.01(a). Notwithstanding any provisions contained herein to the contrary,
solely for federal income tax purposes, items of income, gain, depreciation, gain or loss with
respect to property contributed or deemed contributed to the Partnership by a Partner shall be
allocated so as to take into account the variation between the Partnership’s tax basis in such
contributed property and its Carrying Value pursuant to such method under the Code as is chosen by
the General Partner.
8
5.02 Distributions.
(a) At least once each month prior to commencement of winding up under Section 11.02, the
General Partner shall determine in its reasonable judgment to what extent (if any) the
Partnership’s cash on hand exceeds its current and anticipated needs, including, without
limitation, for operating expenses, debt service, acquisitions, and a reasonable contingency
reserve. If such an excess exists, the General Partner shall cause the Partnership to distribute to
the Partners, in accordance with their Sharing Ratios, an amount in cash equal to that excess.
(b) From time to time the General Partner also may cause property of the Partnership other
than cash to be distributed to the Partners, which distribution must be made in accordance with
their Sharing Ratios and may be made subject to existing liabilities and obligations. Immediately
prior to such a distribution, the capital accounts of the Partners shall be adjusted as provided in
Treas. Reg. § 1.704-1(b)(2)(iv)(f).
(a) Except for situations in which the approval of the Limited Partners is expressly required
by this Agreement or by nonwaivable provisions of applicable law, the General Partner shall have
full, complete, and exclusive authority to manage and control the business, affairs, and properties
of the Partnership, to make all decisions regarding those matters, and to perform any and all other
acts or activities customary or incident to the management of the Partnership’s business. The
General Partner may make all decisions and take all actions for the Partnership not otherwise
provided for in this Agreement.
(b) A Limited Partner may not act for or on behalf of the Partnership, do any act that would
be binding on the Partnership, or incur any expenditures on behalf of the Partnership.
(c) Any Person dealing with the Partnership, other than a Limited Partner, may rely on the
authority of the General Partner in taking any action in the name of the Partnership without
inquiry into the provisions of this Agreement or compliance with it, regardless of whether that
action actually is taken in accordance with the provisions of this Agreement.
6.02 Compensation. The General Partner is not entitled to compensation for its services as
General Partner, but it is entitled to be reimbursed for out-of-pocket costs and expenses incurred
in the course of its service in that capacity in accordance with this Agreement, including for the
portion of its overhead reasonably allocable to Partnership activities.
(a) Except as provided otherwise in this Agreement, the General Partner shall conduct the
affairs of the Partnership in good faith toward the best interests of the Partnership. THE GENERAL
PARTNER IS LIABLE FOR ERRORS OR OMISSIONS IN PERFORMING ITS DUTIES WITH RESPECT TO THE PARTNERSHIP
ONLY IN
9
THE CASE OF BAD FAITH, GROSS NEGLIGENCE, OR BREACH OF THE PROVISIONS OF THIS AGREEMENT, BUT
NOT OTHERWISE. The General Partner shall devote such time and effort to the Partnership business
and operations as is necessary to promote fully the interests of the Partnership; however, the
General Partner need not devote full time to Partnership business.
(b) Subject to the other provisions of this Agreement, the General Partner and each Limited
Partner at any time and from time to time may engage in and possess interests in other business
ventures of any and every type and description, independently or with others, including ones in
competition with the Partnership, with no obligation to offer to the Partnership or any other
Partner the right to participate in those activities.
(c) The Partnership may transact business with any Partner or affiliate of a Partner, provided
the terms of the transactions are no less favorable than those the Partnership could obtain from
unrelated third parties.
6.04 Indemnification. To the fullest extent permitted by law, and subject to the procedures
in Article 11 of the Act, on request by the Person indemnified the Partnership shall indemnify the
General Partner, its affiliates, and their respective officers, directors, partners, employees, and
agents and hold them harmless from and against all losses, costs, liabilities, damages, and
expenses (including, without limitation, costs of suit and attorney’s fees) any of them may incur
as a general partner in the Partnership or in performing the obligations of the General Partner
with respect to the Partnership, SPECIFICALLY INCLUDING THE PERSON INDEMNIFIED’S SOLE, PARTIAL, OR
CONCURRENT NEGLIGENCE, and on request by the Person indemnified the Partnership shall advance
expenses associated with defense of any related action; provided, however, that this indemnity does
not apply to actions constituting bad faith, gross negligence, or breach of the provisions of this
Agreement.
6.05 Power of Attorney. Each Limited Partner appoints the General Partner (and any liquidator
pursuant to Section 11.02) as that Limited Partner’s attorney-in-fact for the purpose of executing,
swearing to, acknowledging, and delivering all certificates, documents, and other instruments as
may be necessary, appropriate, or advisable in the judgment of the General Partner (or the
liquidator) in furtherance of the business of the Partnership or complying with applicable law,
including, without limitation, filings of the type described in Section 2.05. This power of
attorney is irrevocable and is coupled with an interest. On request by the General Partner (or the
liquidator), a Limited Partner shall confirm its grant of this power of attorney or any use of it
by the General Partner (or the liquidator) and shall execute, swear to, acknowledge, and deliver
any such certificate, document, or other instrument.
7.01 Information.
(a) In addition to the other rights set forth in this Agreement, each Limited Partner is
entitled to all information to which that Limited Partner is entitled to have access under the Act
under the circumstances and subject to the conditions therein stated; provided, however, that the
General Partner may determine, due to contractual obligations, business concerns, or
10
other considerations, that certain information regarding the business, affairs, properties,
and financial condition of the Partnership should be kept confidential and not provided to some or
all Limited Partners. The Partners agree that the restrictions in the immediately preceding
sentence are just and reasonable.
(b) The Partners acknowledge that, from time to time, they may receive information from or
regarding the Partnership in the nature of trade secrets or that otherwise is confidential, the
release of which may be damaging to the Partnership or Persons with which it does business. Each
Partner shall hold in strict confidence and not use (except for matters involving the Partnership)
any information it receives regarding the Partnership that is identified as being confidential (and
if that information is provided in writing, that is so marked) and may not disclose it to any
Person other than another Partner, except for disclosures (a) compelled by law (but the Partner
must notify the General Partner promptly of any request for that information, before disclosing it
if practicable), (b) to advisers or representatives of the Partner, but only if the recipients have
agreed to be bound by the provisions of this Section 7.01(b), or (c) of information that Partner
also has received from a source independent of the Partnership that the Partner reasonably believes
obtained that information without breach of any obligation of confidentiality. The Partners
acknowledge that breach of the provisions of this Section 7.01(b) may cause irreparable injury to
the Partnership for which monetary damages are inadequate, difficult to compute, or both.
Accordingly, the Partners agree that the provisions of this Section 7.01(b) may be enforced by
specific performance.
7.02 Withdrawal. A Limited Partner does not have the right or power to withdraw from the
Partnership as a limited partner.
7.03 Consents and Voting.
(a) Subject to the provisions of Section 6.03(a) with respect to the General Partner in its
capacity as such, a Partner (including the General Partner with respect to any Partnership Interest
it may have as a Limited Partner) may grant or withhold its consent or vote its interest in its
sole discretion, without regard to the interests of the Partnership or any other Partner.
(b) In any request for consent or approval from another Partner, the General Partner may
specify a response period, ending no earlier than the fifth and no later than the 15th Business Day
following the date on which the Partner whose consent or approval is sought receives the request as
described in Section 12.02. If the receiving Partner does not respond by the end of this period, it
shall be deemed to have consented to or approved the action set forth in the request.
7.04 Meetings. On written request of Partners having 50% of the Sharing Ratios, the General
Partner shall call, and at any time it may call, a meeting of the Partners to transact business
that the Partners or any group of Partners may conduct as provided in this Agreement. The call must
be made by notice to all other Partners on or before the tenth day prior to the date of the meeting
specifying the location and the time and stating the business to be transacted at the meeting,
which must include any items the Partners requesting the meeting have specified in their request.
The chairperson of the meeting shall be an individual the General Partner specifies.
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At the meeting, the Partners may take any action included in the notice of the meeting by vote
of Partners present, in person or by proxy, constituting Partners whose consent is required for
that action pursuant to the other provisions of this Agreement. With respect to other matters, the
meeting must be conducted in accordance with rules that the General Partner may establish.
8.01 Tax Returns. The General Partner shall cause to be prepared and filed all necessary
federal and state income tax returns for the Partnership, including making the elections described
in Section 8.02. Each Limited Partner shall furnish to the General Partner all pertinent
information in its possession relating to Partnership operations that is necessary to enable the
Partnership’s income tax returns to be prepared and filed.
8.02 Tax Elections. The Partnership shall make the following elections on the appropriate tax
returns:
(a) to adopt a fiscal year ending on December 31 of each year;
(b) to adopt the accrual method of accounting and to keep the Partnership’s books and records
on the income-tax method;
(c) pursuant to section 754 of the Code, to adjust the basis of Partnership properties; and
(d) any other election the General Partner may deem appropriate and in the best interests of
the Partners.
Neither the Partnership nor any Partner may make an election for the Partnership to be excluded
from the application of the provisions of subchapter K of chapter 1 of subtitle A of the Code or
any similar provisions of applicable state law.
8.03 Tax Matters Partner. The General Partner shall be the “tax matters partner” of the
Partnership pursuant to section 6231(a)(7) of the Code. The General Partner shall take such action
as may be necessary to cause each Limited Partner to become a “notice partner” within the meaning
of section 6223 of the Code. The General Partner shall inform each Limited Partner of all
significant matters that may come to its attention in its capacity as tax matters partner by giving
notice on or before the fifth Business Day after becoming aware of the matter and, within that
time, shall forward to each Limited Partner copies of all significant written communications it may
receive in that capacity.
9.01 Maintenance of Books. The books of account for the Partnership shall be maintained on a
accrual basis in accordance with the terms of this Agreement, except that the capital accounts of
the Partners shall be maintained in accordance with Section 4.04. The accounting year of the
Partnership shall end on December 31 of each year.
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9.02 Reports. If requested by any Partner in writing, on or before the 120th day following
the end of each fiscal year during the term of the Partnership, the General Partner shall cause
each Limited Partner to be furnished with a balance sheet, an income statement, and a statement of
changes in Partners’ capital of the Partnership for, or as of the end of, that year. These
financial statements must be prepared in accordance with accounting principles generally employed
for cash basis records consistently applied (except as noted in the statements). The General
Partner also may cause to be prepared or delivered such other reports as it may deem appropriate.
The Partnership shall bear the costs of all these reports.
9.03 Accounts. The General Partner shall establish and maintain one or more separate bank and
investment accounts and arrangements for Partnership funds in the Partnership name with financial
institutions and firms that the General Partner determines. The General Partner may not commingle
the Partnership’s funds with the funds of any Partner; however, Partnership funds may be invested
in a manner the same as or similar to the General Partner’s investment of its own funds or
investments by its affiliates.
ARTICLE X: WITHDRAWAL, BANKRUPTCY, ETC. OF GENERAL PARTNER
10.01 Withdrawal, Bankruptcy, Etc. of General Partner.
(a) The General Partner agrees that it will not withdraw from the Partnership as the general
partner within the meaning of Section 6.02(a) of the Act. If the General Partner withdraws from the
Partnership in violation of this covenant, the withdrawal is effective on the 90th day following
notice of the withdrawal to all Limited Partners, or such later date as the notice may specify. On
a withdrawal in violation of this Section 10.01(a), the Partnership’s remedies shall be limited to
the recovery of monetary damages arising from such violation, it being understood that neither the
Partnership nor any Limited Partner shall have the right, through specific performance or
otherwise, to prevent the General Partner from withdrawing in violation of this Agreement.
(b) The General Partner does not cease to be the general partner in the Partnership on the
occurrence of an event of the type described in Section 4.02(a)(7)-(9) of the Act, but ceases to be
the general partner on the substantial completion of winding up of the General Partner’s
activities. The General Partner shall notify each Limited Partner that an event of the type
described in Section 4.02(a)(4), (5), or (7)-(10) of the Act has occurred with respect to it on or
before the fifth Business Day after that occurrence.
(c) Following any notice that the General Partner is withdrawing, or following the occurrence
of an event of the type described in Section 4.02(a)(4)-(10) of the Act with respect to the General
Partner (without regard to the lapse of any time periods), a Required Interest by written consent
may select a new General Partner. The Person selected shall be admitted to the Partnership as the
General Partner effective immediately prior to the existing General Partner’s ceasing to be the
General Partner with a Sharing Ratio that the Limited Partners making the selection specify, but
only if the new General Partner has made a Capital Contribution in an amount the Limited Partners
making the selection specify and has executed and delivered to the Partnership a document including
the new General Partner’s notice address and its agreement to be bound by this Agreement.
Notwithstanding the foregoing provisions of
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this Section 10.01(c), for the right to select a new General Partner to exist or be exercised,
the Partnership must receive a favorable opinion of the Partnership’s legal counsel or of other
legal counsel acceptable to the Limited Partners making the selection to the effect that the
selection and admission (if any) will not result in (i) the loss of limited liability of any
Limited Partner or (ii) the Partnership’s being treated as an association taxable as a corporation
for federal income tax purposes. Notwithstanding the foregoing provisions of this Section 10.01(c),
the selection of a new General Partner shall be rescinded (and the existing General Partner shall
continue as such) if the event that permitted the selection of a new General Partner is an event of
the type described in Section 4.02(a)(5) of the Act that with the passage of time would cause the
existing General Partner to become a Bankrupt Partner but that situation does not continue and the
existing General Partner does not become a Bankrupt Partner.
10.02 Conversion of Interest. Simultaneously with the General Partner’s ceasing to be General
Partner following the admission of a new General Partner pursuant to Section 10.01(c), the former
General Partner’s Partnership Interest as the General Partner automatically is converted into that
of a Limited Partner having a Sharing Ratio equal to the Sharing Ratio of the former General
Partner as the General Partner immediately prior to its ceasing to be the General Partner, and the
General Partner automatically is admitted to the Partnership as a Limited Partner.
11.01 Dissolution. The Partnership shall dissolve and its business and affairs shall be wound
up on the first to occur of the following:
(a) the written consent of the General Partner and a Required Interest;
(b) the date set forth in Section 2.06;
(c) the General Partner’s ceasing to be the General Partner as described in Section 10.01(a)
or (b), unless a new General Partner is selected and admitted as provided in Section 10.01(c); or
(d) any other event causing dissolution as described in Section 8.01 of the Act (other than an
event described in Section 4.02(a)(4) or (7)-(10) of the Act, except as provided in Sections
10.01(b) and 11.01(c));
provided, however, that if dissolution occurs due to an “event of withdrawal” (as defined in
Section 4.02(a) of the Act) with respect to the General Partner and a new General Partner is being
admitted pursuant to Section 10.01(c), the Partnership automatically shall be reconstituted and the
new General Partner shall, and hereby agrees to, carry on the business of the Partnership.
11.02 Liquidation and Termination. On dissolution of the Partnership, unless it is
reconstituted and continued as provided in Section 11.01, the General Partner shall act as
liquidator or may appoint one or more other Persons as liquidator; provided, however, that if the
Partnership dissolves on account of an event of the type described in Section 4.02(a)(4)-(10) of
the Act with respect to the General Partner, the liquidator shall be one or more Persons selected
in writing by a Required Interest. The liquidator shall proceed diligently to wind up the affairs
of
14
the Partnership and make final distributions as provided in this Agreement. The costs of
liquidation shall be borne as a Partnership expense. Until final distribution, the liquidator shall
continue to operate the Partnership properties with all of the power and authority of the General
Partner. The steps to be accomplished by the liquidator are as follows:
(a) as promptly as practicable after dissolution and again after final liquidation, the
liquidator shall cause a proper accounting to be made by a recognized firm of certified public
accountants of the Partnership’s assets, liabilities, and operations through the last day of the
calendar month in which the dissolution occurs or the final liquidation is completed, as
applicable;
(b) the liquidator shall pay from Partnership funds all of the debts and liabilities of the
Partnership (including, without limitation, all expenses incurred in liquidation and any advances
described in Section 4.03) or otherwise make adequate provision for them (including, without
limitation, the establishment of a cash escrow fund for contingent liabilities in such amount and
for such term as the liquidator may reasonably determine); and
(c) all remaining assets of the Partnership shall be distributed to the Partners as follows:
(i) the liquidator may sell any or all Partnership property, including to
Partners, and any resulting gain or loss from each sale shall be computed and
allocated to the capital accounts of the Partners;
(ii) with respect to all Partnership property that has not been sold, the fair
market value of that property shall be determined and the capital accounts of the
Partners shall be adjusted to reflect the manner in which the unrealized income,
gain, loss, and deduction inherent in property that has not been reflected in the
capital accounts previously would be allocated among the Partners if there were a
taxable disposition of that property for the fair market value of that property on
the date of distribution; and
(iii) Partnership property shall be distributed among the Partners in
accordance with the positive capital account balances of the Partners, as determined
after taking into account all capital account adjustments for the taxable year of
the Partnership during which the liquidation of the Partnership occurs (other than
those made by reason of this clause (iii)); and those distributions shall be made by
the end of the taxable year of the Partnership during which the liquidation of the
Partnership occurs (or, if later, 90 days after the date of the liquidation).
All distributions in kind to the Partners shall be made subject to the liability of each
distributee for its allocable share of costs, expenses, and liabilities previously incurred or for
which the Partnership has committed prior to the date of termination and those costs, expenses, and
liabilities shall be allocated to the distributee under this Section 11.02. The distribution of
cash and/or property to a Partner in accordance with the provisions of this Section 11.02
constitutes a complete return to the Partner of its Capital Contributions and a complete
distribution to the
15
Partner of its Partnership Interest and all the Partnership’s property and constitutes a compromise
to which all Partners have consented within the meaning of Section 5.02(d) of the Act. To the
extent that a Partner returns funds to the Partnership, it has no claim against any other Partner
for those funds.
11.03 Termination. On completion of the distribution of Partnership assets as provided in
this Agreement, the Partnership is terminated, and the General Partner (or such other Person or
Persons as the Act may require or permit) shall cause the cancellation of the Certificate and any
filings made as provided in Section 2.05 and shall take such other actions as may be necessary to
terminate the Partnership.
12.01 Offset. Whenever the Partnership is to pay any sum to any Partner, any amounts that
Partner owes the Partnership may be deducted from that sum before payment.
12.02 Notices. All notices, requests, or consents provided for or permitted to be given under
this Agreement must be in writing and must be given either by depositing that writing in the United
States mail, addressed to the recipient, postage paid, and registered or certified with return
receipt requested or by delivering that writing to the recipient in person, by courier, or by
facsimile transmission. A notice, request, or consent given under this Agreement is effective on
receipt at the address of the Person to receive it. All notices, requests, and consents to be sent
to a Partner must be sent to or made at the addresses given for that Partner on Exhibit A or in the
instrument described in Section 10.01(c), or such other address as that Partner may specify by
notice to the other Partners. Any notice, request, or consent to the Partnership must be given to
the General Partner.
12.03 Entire Agreement; Supersedure. This Agreement constitutes the entire agreement of the
Partners and their affiliates relating to the Partnership and supersedes all prior contracts or
agreements with respect to the Partnership, whether oral or written.
12.04 Effect of Waiver or Consent. A waiver or consent, express or implied, to or of any
breach or default by any Person in the performance by that Person of its obligations with respect
to the Partnership is not a consent or waiver to or of any other breach or default in the
performance by that Person of the same or any other obligations of that Person with respect to the
Partnership. Failure on the part of a Person to complain of any act of any Person or to declare any
Person in default with respect to the Partnership, irrespective of how long that failure continues,
does not constitute a waiver by that Person of its rights with respect to that default until the
applicable statute of-limitations period has run.
12.05 Amendment or Modification. This Agreement may be amended or modified from time to time
only by a written instrument executed by all of the Partners.
12.06 Binding Effect. Subject to the restrictions on Dispositions set forth in this
Agreement, this Agreement is binding on and inures to the benefit of the Partners and their
respective heirs, legal representatives and successors.
16
12.07 Governing Law; Severability. THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF TEXAS, EXCLUDING ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE
THAT MIGHT REFER THE GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER
JURISDICTION. If any provision of this Agreement or its application to any Person or circumstance
is held invalid or unenforceable to any extent, the remainder of this Agreement and the application
of that provision to other Persons or circumstances is not affected and that provision shall be
enforced to the greatest extent permitted by law.
12.08 Further Assurances. In connection with this Agreement and the transactions contemplated
by it, each Partner shall execute and deliver any additional documents and instruments and perform
any additional acts that may be necessary or appropriate to effectuate and perform the provisions
of this Agreement and those transactions.
12.09 Waiver of Certain Rights. Each Partner irrevocably waives any right it may have to
maintain any action for dissolution of the Partnership or for partition of the property of the
Partnership.
12.10 Indemnification. To the fullest extent permitted by law, each Partner shall indemnify
the Partnership and each other Partner and hold them harmless from and against all losses, costs,
liabilities, damages, and expenses (including, without limitation, costs of suit and attorney’s
fees) they may incur on account of any breach by that Partner of this Agreement.
12.11 Counterparts. This Agreement maybe executed in any number of counterparts with the same
effect as if all signing parties had signed the same document. All counterparts shall be construed
together and constitute the same instrument.
[Signature page follows]
17
EXECUTED as of the date first set forth above.
| GENERAL PARTNER: | ||||
| DEP OPERATING PARTNERSHIP, L.P. | ||||
| By: | DEP OLPGP, LLC, | |||
| its general partner | ||||
| By: | /s/ Xxxxxxx X. Xxxxx | |||
| Xxxxxxx X. Xxxxx | ||||
| Executive Vice President and Chief Financial Officer | ||||
| LIMITED PARTNERS: | ||||
| ENTERPRISE PRODUCTS OPERATING L.P. | ||||
| By: | Enterprise Products OLPGP, Inc., | |||
| its general partner | ||||
| By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
| Xxxxxxx X. Xxxxxxxx | ||||
| Executive Vice President, Chief Legal Officer and Secretary | ||||
| PROPYLENE PIPELINE PARTNERSHIP, L.P. | ||||
| By: | ||||
| ENTERPRISE PRODUCTS OPERATING L.P., its general partner | ||||
| By: Enterprise Products OLPGP, Inc., | ||||
| its general partner | ||||
| By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
| Xxxxxxx X. Xxxxxxxx | ||||
| Executive Vice President, Chief Legal Officer and Secretary | ||||
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EXHIBIT A
| Name and Address of Partner | Sharing Ratio | |||
General
Partner: |
||||
Xxxxxx Energy Partners L.P. 0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx Xxxxxxx, Xxxxx 00000 |
66 | % | ||
Limited Partners: |
||||
Enterprise Products Operating L.P. 0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx Xxxxxxx, Xxxxx 00000 |
33 | % | ||
Propylene Pipeline Partnership, L.P. 0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx Xxxxxxx, Xxxxx 00000 |
1 | % | ||
