Second Amendment to Amended and Restated
Agreement and Certificate of Limited Partnership of
Geodyne Energy Income Limited Partnership I-E
This Second Amendment to Amended and Restated Agreement and Certificate of
Limited Partnership of Geodyne Energy Income Limited Partnership I-E (the
"Partnership") is entered into by and between Geodyne Properties, Inc.
("Properties"), a Delaware corporation, as General Partner, and all Additional
and Substituted Limited Partners admitted to the Partnership.
WHEREAS, on March 5, 1986, Properties and the Initial Limited Partner
executed and entered into that certain PaineWebber/Geodyne Energy Income Limited
Partnership I-E Agreement and Certificate of Limited Partnership (the
"Preformation Agreement"); and
WHEREAS, on September 10, 1986, Properties executed and entered into that
certain Amended and Restated Agreement and Certificate of Limited Partnership
(the "Amended Agreement"); and
WHEREAS, on February 25, 1993, Properties executed and entered into that
certain First Amendment to the Amended Agreement whereby it changed (i) the name
of the Partnership from "PaineWebber/Geodyne Energy Income Partnership I-E" to
"Geodyne Energy Income Limited Partnership I-E", (ii) the address of the
Partnership's principal place of business, and (iii) the address for the
Partnership's agent for service of process; and
WHEREAS, Section 10.1 of the Amended Agreement provides that the General
Partner may, without prior notice or consent of any Limited Partner, amend any
provision of this Amended Agreement and Certificate if, in its opinion, such
amendment does not have a material adverse effect upon the Limited Partners; and
WHEREAS, Properties as General Partner desires to amend the Amended
Agreement in order to (i) expedite the method of accepting transfers of Limited
Partners' Interests in the Partnership and (ii) revise the terms of the optional
right of presentment which may be exercised by the Limited Partners.
NOW, THEREFORE, in consideration of the covenants, conditions and
agreements herein contained, the parties hereto hereby agree as follows:
I. The last sentence contained in Section 7.3A of the Amended Agreement is
hereby amended and restated as follows:
Any sale, assignment or transfer shall be recognized by the Limited
Partnership as effective on the first business day of the month following
the General Partner's receipt of such notification.
-1-
II. The Amended Agreement is hereby amended to provide for a new Article 15.
Said Article is hereby stated as follows:
Article 15
Section 15.1. Optional Repurchase Right
---------------------------------------
Any Limited Partner shall have the right, at his option, to present
his Interests to the General Partner or its designated Affiliate for
repurchase on the basis set forth in this Article 15.
Section 15.2. Procedure for Repurchase
--------------------------------------
A. As of December 31, 1992 and annually thereafter (the
"Appraisal Date") the General Partner shall appraise the
Proved Reserves and other assets of the Partnership pursuant
to the provisions set forth herein and shall assign a
repurchase price (the "Repurchase Price") to the Limited
Partners' Interests in the Partnership in accordance with the
provisions set forth herein.
B. In arriving at the Repurchase Price, the General Partner shall
consider those factors deemed relevant by it including,
without limitation, the following:
(i) the present value of the estimated future net revenues
of the Production Partnership's Proved Reserves,
calculated as described below; and
(ii) the book value of all other Partnership assets and
liabilities.
Section 15.3. Calculation of Present Value of the
Partnership's Estimated Future Net Revenues.
------------------------------------------------------------
In calculating the present value of the Partnership's Estimated
Future Net Revenues the General Partner shall use the petroleum
engineering reports and other petroleum reserve information required
to be furnished to the Limited Partners pursuant to Section 9.4C of
the Agreement.
-2-
Future gross revenues expected to be derived from the production and
sale of the Proved Reserves attributable to the Production
Partnership's Producing Properties shall be estimated using either
(i) escalations of future sales prices of Hydrocarbons supplied by
the General Partner (the "Escalated Case") or (ii) sales prices of
Hydrocarbons provided by Regulation S-X adopted by the Securities
and Exchange Commission (the "SEC Case"), as the General Partner may
determine in its sole discretion.
Future net revenues shall be calculated by deducting anticipated
expenses (using either (i) escalations of future costs supplied by
the General Partner if the General Partner adopted the Escalated
Case with respect to future sales prices of Hydrocarbons or (ii)
constant future costs if the General Partner adopted the SEC Case
with respect to future sales prices of Hydrocarbons) from estimated
future gross revenues.
The present value of the future net revenues shall be calculated by
discounting the estimated future net revenues at either 10% (if the
General Partner employed future pricing criteria in accordance with
the SEC Case) or that rate per annum which is one percentage point
higher than the prime rate of interest of The Chase Manhattan Bank,
N.A. or any successor bank, as of the Appraisal Date (if the General
Partner employed pricing criteria in accordance with the Escalated
Case, provided, however, that such discount rate will not exceed 18%
per annum and will be no less than 10% per annum).
Section 15.4. Risk Reduction.
-----------------------------
In determining the Repurchase Price for Limited Partners pursuant to
this Section 15, the present value of the Partnership's Proved
Developed Producing Reserves shall be reduced by 25% for risk and
the present value of all other categories of Proved Reserves shall
be reduced by 35% for risk. The risk reductions shall be subject to
upward or downward adjustment by the General Partner if, during the
period between the Appraisal Date and the Effective Date (as defined
in Section 15.5), there has been a material increase or decrease in
the current price of oil or gas or in the estimated amount of the
Partnership's Proved Reserves.
-3-
Section 15.5. Tender Procedure.
---------------------------------
Upon completion of the appraisal of the Partnership's assets as of
the Appraisal Date, the General Partner shall notify each Limited
Partner of the Repurchase Price and his proportionate share thereof
and either the General Partner or one of its Affiliates will offer
to purchase such Limited Partner's Interests in exchange for such
Unit Holder's proportionate share of the Repurchase Price (a
"Repurchase Offer"). Any Limited Partner desiring to do so may
accept such Repurchase Offer by notifying the General Partner of his
election. Limited Partners so notifying the General Partner shall be
referred to herein as "Electing Limited Partners". The General
Partner or its designated Affiliate shall thereupon promptly pay to
each Electing Limited Partner, his proper share of the Repurchase
Price, calculated as herein set forth, within 30 days from the date
which a properly drawn assignment of such Electing Limited Partner's
interest, free and clear of all liens and encumbrances, is tendered
to and accepted by the General Partner or its designated Affiliate
(the "Effective Date"). Upon the acquisition of an Electing Limited
Partner's Interests, the General Partner or its designated Affiliate
shall, as of the Effective Date of such acquisition, succeed to all
the rights and obligations attributable to such interest.
Section 15.6. Monthly Adjustment to Repurchase Price
-----------------------------------------------------
The Repurchase Price shall be recalculated monthly with the
Repurchase Price being reduced by the amount of any cash
distributions to Limited Partners during the period from the
Appraisal Date to the date of the payment of the Repurchase Price
and shall otherwise be adjusted to reflect the effect of material
operations during such period, including a material increase or
decrease in the current price of oil or gas or in the estimated
amount of the Partnership's Proved Reserves. In the event the
Repurchase Price is adjusted for any reason other than to reflect
the payment of cash distributions, the General Partner shall provide
written notification of such adjustment to the Limited Partners at
least ten (10) business days prior to acceptance of Units for
purchase.
-4-
Section 15.7. Limitation on Units Repurchased.
----------------------------------------------
A. At the sole discretion of the General Partner, the General
Partner or its designated Affiliate may either (i) limit the
time period in which it will accept tendered Units for
repurchase or (ii) limit the amount of Units to be accepted
for repurchase; provided, however, that in any event the
annual repurchase offer will (i) remain open for at least
thirty (30) days and (ii) the General Partner or its
designated Affiliate will offer to annually repurchase (and
will purchase validly presented Units) at least 10% of the
outstanding Units of the Partnership. In the event the General
Partner or its designated Affiliate imposes a limitation, the
General Partner will either (i) specify such limitation(s) in
the annual Repurchase Offer mailed to the Limited Partners or
(ii) provide all Limited Partners with written notification of
such limitation(s) at least thirty (30) days prior to the
effective date of any such limitation(s).
B. In the event the General Partner imposes a limitation upon the
number of Interests to be repurchased in the Partnership, and
the amount of Interests tendered, but not repurchased, exceeds
such limitation, such tendered Interests will be accepted for
repurchase by lot.
C. In addition, in order to avoid certain possible adverse tax
consequences, the General Partner may, in order to comply with
the regulations or procedures under Section 469(k) of the
Internal Revenue Code of 1986, as amended, relating to
"publicly traded partnerships," (i) delay or defer the
Effective Date of any repurchase and (ii) limit the total
number of Interests of any Partnership to be repurchased in
any 12-month period to the maximum number provided in such
regulations and procedures. In the event of such delay or
deferral, the General Partner shall notify the Electing
Limited Partner of the reasons therefor and shall provide the
Electing Limited Partner with the option to withdraw his
tender of Interests for repurchase.
-5-
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands as
of the 4th day of August, 1993.
Geodyne Properties, Inc.
as General Partner
By: // C. Xxxxxx Xxxxxx //
----------------------
C. Xxxxxx Xxxxxx
President
Geodyne Properties, Inc.,
as Attorney-in-Fact for
the Limited Partners
By: // Xxxxxx X. Xxxxx //
---------------------
Xxxxxx X. Xxxxx
Xx. Vice President
-6-
