Exhibit 99.12
Exhibit 3
FOURTH AMENDED AND RESTATED
AGREEMENT
OF
LIMITED PARTNERSHIP
OF
FERRELLGAS PARTNERS, L.P.
FOURTH AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
FERRELLGAS PARTNERS, L.P.
THIS FOURTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
FERRELLGAS PARTNERS, L.P., dated as of February 18, 2003, is entered into by and
among Ferrellgas, Inc., a Delaware corporation, as the General Partner, the
Persons who are Limited Partners in the Partnership as of the date hereof and
those 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:
RECITALS:
WHEREAS, the General Partner and the organizational Limited Partner
organized the Partnership as a Delaware limited partnership pursuant to an
Agreement of Limited Partnership dated as of July 5, 1994 (the "Original
Agreement");
WHEREAS, the Partnership, the Operating Partnership and Xxxxxxxx Natural
Gas Liquids, Inc., a Delaware corporation, entered into a Purchase Agreement
dated November 7, 1999, relating to the sale of Thermogas, L.L.C. to the
Partnership in consideration, in part, for the issuance of Senior Units, as
defined below;
WHEREAS, to effect the transactions contemplated by the WNGL Purchase
Agreement and other matters, the Original Agreement was amended and restated
(the "Amended and Restated Agreement");
WHEREAS, on May 14, 2000, the General Partner made certain amendments to
the Amended and Restated Agreement with the consent of the holder of all of the
Senior Units, as allowed by the Amended and Restated Agreement;
WHEREAS, on June 5, 2000, the holders of Common Units approved a proposal
at a special meeting of such holders to amend the definition of "Outstanding"
under the Amended and Restated Agreement; and
WHEREAS, on June 5, 2000, the General Partner amended and restated the
Amended and Restated Agreement (the "Second Amended and Restated Agreement") to
convert the General Partner's percentage interest in the partnership into
General Partner Units (as defined below) and make related amendments, which
amendment and restatement was made pursuant to Section 15.1 of the Amended and
Restated Agreement that provides that the General Partner may amend the Amended
and Restated Agreement without the consent of any Limited Partner to reflect a
change that, in the sole discretion of the General Partner, does not adversely
affect the Limited Partners in any material respect;
WHEREAS, on April 6, 2001, the Second Amended and Restated Agreement was
amended and restated (the "Third Amended and Restated Agreement") to reflect (a)
certain amendments to the Second Amended and Restated Agreement made with the
consent in writing of the holder of all of the Senior Units, as allowed by the
Second Amended and Restated Agreement, (b) certain amendments made pursuant to
Section 15.1 of the Second Amended and Restated Agreement that provides that the
General Partner may amend the Second Amended and Restated Agreement without the
consent of any Limited Partner to reflect a change that, in the sole discretion
of the General Partner, does not adversely affect the Limited Partners in any
material respect, and (c) the addition of Sections 5.4(a), (b) and (c) proposed
by the General Partner to allow the Common Units held by FCI, as defined below,
to defer specified payments of Available Cash, as defined below, which
amendments were consented to in writing by the Limited Partners owning not less
than the minimum percentage of the Outstanding Units that were necessary to
authorize or take such action at a meeting at which all the Limited Partners
entitled to vote thereon were present and voted in accordance with Section 15.11
of the Second Amended and Restated Agreement, and, which addition of Sections
5.4(a), (b) and (c) became effective as of the end of the Information Statement
Period, as defined below.
NOW, THEREFORE, the Third Amended and Restated Agreement is hereby amended
to reflect certain amendments made pursuant to Section 15.1 of the Third Amended
and Restated Agreement that provides that the General Partner may amend the
Third Amended and Restated Agreement without the consent of any Limited Partner
to reflect a change that:
(a) in the sole discretion of the General Partner, does not adversely
affect the Limited Partners in any material respect; or
(b) is required to effect the intent of the provisions of the Third Amended
and Restated Agreement or are otherwise contemplated by the Third Amended and
Restated Agreement,
which amendments, among other things, are intended to correct an unintentional
alteration of the economic terms of the Second Amended and Restated Agreement,
which alteration changed the distributions to be made to the General Partner (as
the holder of the General Partner Units) in certain circumstances, and, as so
amended, is restated in its entirety as follows:
2
ARTICLE I
ORGANIZATIONAL MATTERS
--------------------------
Section 1.1 Formation and Continuation.
--------------------------
(a) The General Partner and the organizational Limited Partner previously formed
the Partnership as a limited partnership pursuant to the provisions of the
Delaware Act. The General Partner hereby amends and restates the Second Amended
and Restated 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.
(b) In connection with the formation of the Partnership, Ferrellgas was admitted
as a general partner of the Partnership, and the organizational Limited Partner
was admitted as a limited partner of the Partnership. As of the Initial Closing
Date, the interest in the Partnership of the organizational Limited Partner was
terminated and the organizational Limited Partner withdrew as a limited partner
of the Partnership.
Section 1.2 Name. The name of the Partnership is "Ferrellgas Partners, L.P." The
Partnership's business may be conducted under any other name or names deemed
necessary or appropriate by the General Partner, including, without limitation,
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 purposes of complying with the laws of any jurisdiction that
so requires. The General Partner in its sole 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.
Section 1.3 Registered Office; Principal Office. Unless and until changed by the
General Partner, the registered office of the Partnership in the State of
Delaware shall be located at The Corporation Trust Center, 1209 Orange Street,
New Castle County, 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 The Corporation Trust Company. The principal office
of the Partnership shall be located at, and the address of the General Partner
shall be, Xxx Xxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, or such other place as the
General Partner may from time to time designate by notice to the Limited
Partners. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems necessary
or appropriate.
3
Section 1.4 Power of Attorney.
-----------------
(a) Each Limited Partner and each Assignee hereby constitutes and appoints each
of the General Partner and, if a Liquidator shall have been selected pursuant to
Section 14.3, the Liquidator severally (and any successor to either thereof by
merger, transfer, assignment, election or otherwise) and each of their
authorized officers and attorneys-in-fact, 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, without limitation, this Agreement and the
Certificate of Limited Partnership and all amendments or restatements
thereof) that the General Partner 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 General Partner
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, without limitation, conveyances and a
certificate of cancellation) that the General Partner 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 XI, XII,
XIII or XIV or the Capital Contribution of any Partner; (E) all
certificates, documents and other instruments relating to the
determination of the rights, preferences and privileges of any class
or series of Units or other Partnership Securities issued pursuant to
Section 4.2; and (F) all certificates, documents and other instruments
(including, without limitation, agreements and a certificate of
merger) relating to a merger or consolidation of the Partnership
pursuant to Article XVI; 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 sole discretion of the
General Partner 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 sole
discretion of the General Partner or the Liquidator, to effectuate the
terms or intent of this Agreement; provided, that when required by
Section 15.3 or any other provision of this Agreement that establishes
a percentage of the Limited Partners or of the Limited Partners of any
class or series required to take any action, the General Partner or
the Liquidator may exercise the power of attorney made in this Section
1.4(a)(ii) only after the necessary vote, consent or approval of the
Limited Partners or of the Limited Partners of such class or series,
as applicable.
Nothing contained in this Section 1.4(a) shall be construed as authorizing
the General Partner to amend this Agreement except in accordance with Article XV
or as may be otherwise expressly provided for in this Agreement.
4
(b) The foregoing power of attorney is hereby declared to be irrevocable
and a power coupled with an interest, and it shall survive and not be affected
by the subsequent death, incompetency, disability, incapacity, dissolution,
bankruptcy or termination of any Limited Partner or Assignee and the transfer of
all or any portion of such Limited Partner's or Assignee's Partnership Interest
and shall extend to such Limited Partner's or Assignee's heirs, successors,
assigns and personal representatives. Each such Limited Partner or Assignee
hereby agrees to be bound by any representation made by the General Partner or
the Liquidator acting in good faith pursuant to such power of attorney; and each
such Limited Partner or Assignee hereby waives any and all defenses that may be
available to contest, negate or disaffirm the action of the General Partner or
the Liquidator taken in good faith under such power of attorney. Each Limited
Partner or Assignee shall execute and deliver to the General Partner or the
Liquidator, within 15 days after receipt of the General Partner's or the
Liquidator's request therefor, such further designation, powers of attorney and
other instruments as the General Partner or the Liquidator deems necessary to
effectuate this Agreement and the purposes of the Partnership.
Section 1.5 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 July 31, 2084,
or until the earlier dissolution of the Partnership in accordance with the
provisions of Article XIV.
Section 1.6 Possible Restrictions on Transfer. Notwithstanding anything to
the contrary contained in this Agreement, in the event of (a) the enactment (or
imminent enactment) of any legislation, (b) the publication of any temporary or
final regulation by the Treasury Department, (c) any ruling by the Internal
Revenue Service or (d) any judicial decision, that, in any such case, in the
Opinion of Counsel, would result in the taxation of the Partnership as an
association taxable as a corporation or would otherwise result in the
Partnership's being taxed as an entity for federal income tax purposes, then,
the General Partner may impose such restrictions on the transfer of Units or
Partnership Interests as may be required, in the Opinion of Counsel, to prevent
the Partnership from being taxed as an association taxable as a corporation or
otherwise as an entity for federal income tax purposes, including, without
limitation, making such amendments to this Agreement as the General Partner in
its sole discretion may determine to be necessary or appropriate to impose such
restrictions, provided, that any such amendment to this Agreement that would
result in the delisting or suspension of trading of any class of Units on any
National Securities Exchange on which such class of Units is then traded must be
approved by the holders of at least two-thirds of the Outstanding Units of such
class (excluding the vote in respect of Units held by the General Partner and
its Affiliates).
ARTICLE II
DEFINITIONS
---------------
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
"Acquisition" means any transaction in which the Partnership or
the Operating Partnership acquires (through an asset acquisition,
merger, stock acquisition or other form of investment) control over
all or a portion of the assets, properties or business of another
Person for the purpose of increasing the operating capacity of the
Partnership and the Operating Partnership, taken as a whole, from the
operating capacity of the Partnership and the Operating Partnership,
taken as a whole, existing immediately prior to such transaction.
5
"Additional Limited Partner" means a Person admitted to the
Partnership as a Limited Partner pursuant to Section 12.4 and who is
shown as such on the books and records of the Partnership.
"Additional Senior Units" has the meaning assigned to such term
in Section 5.4.
"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 5.1(d)(i) or 5.1(d)(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. The "Adjusted Capital Account" in
respect of a Common Unit, a General Partner Unit, a Senior Unit, an
IDR or any other specified interest in the Partnership shall be the
amount which such Adjusted Capital Account would be if such Common
Unit, General Partner Unit, Senior Unit or IDR or other interest in
the Partnership were the only interest in the Partnership held by a
Partner.
"Adjusted Property" means any property the Carrying Value of
which has been adjusted pursuant to Section 4.5(d)(i) or 4.5(d)(ii).
"Affiliate" means, with respect to any Person, any other Person
that directly or indirectly controls, is controlled by or is under
common control with, the Person in question. As used herein, the term
"control" means the possession, directly or indirectly, 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 5.1, including, without limitation, a
Curative Allocation (if appropriate to the context in which the term
"Agreed Allocation" is used).
6
"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 General Partner using such
reasonable method of valuation as it may adopt. The General Partner
shall, in its sole 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.
"Amended and Restated Agreement" has the meaning assigned to such
term in the recitals hereto.
"Agreement" means this Fourth Amended and Restated Agreement of
Limited Partnership of Ferrellgas Partners, L.P., as it may be
amended, supplemented or restated from time to time.
"Amended and Restated Agreement" has the meaning assigned to such
term in the recitals hereto.
"Arrearage" means as to each Quarter within the Arrearage Period,
the excess, if any, of (a) the sum of all Available Cash distributed
pursuant to Sections 5.4(a)(ii) through 5.4(a)(vi) or 5.4(b)(ii), as
applicable, over (b) the sum of all Available Cash distributed
pursuant to Section 5.4(a)(vii) or Section 5.4(b)(iii), as applicable,
and categorized by Unit or Special Limited Partner for each Quarter
according to the amount of the excess accrued for that Unit or Special
Limited Partner pursuant to each clause of Section 5.4(a) or Section
5.4(b), as applicable. Upon payment of any amount of the Arrearage
pursuant to Section 5.4(b)(iv) or Section 5.4(c)(iii), that amount
shall no longer be considered an Arrearage.
"Arrearage Period" means the period commencing at the end of the
Information Statement Period, and ending on the earlier of (a)
December 31, 2005, (b) a Change of Control, (c) upon the occurrence of
an event that causes the dissolution of the Partnership in accordance
with Section 14.1, or (d) the date on which FCI no longer beneficially
owns any FCI Common Units.
"Assignee" means a Non-citizen Assignee or a Person to whom one
or more Units have been transferred in a manner permitted under this
Agreement and who has executed and delivered a Transfer Application as
required by this Agreement, but who has not become a Substituted
Limited Partner.
"Associate" means, when used to indicate a relationship with any
Person, (i) any corporation or organization of which such Person is a
director, officer or partner or is, directly or indirectly, the owner
of 20% or more of any class of voting stock or other voting interest
of such corporation or organization; (ii) any trust or other estate in
which such Person has at least a 20% beneficial interest or as to
which such Person serves as trustee or in a similar fiduciary
capacity; and (iii) any relative or spouse of such Person, or any
relative of such spouse, who has the same residence as such Person.
7
"Audit Committee" means a committee of the Board of Directors of
the General Partner composed entirely of two or more directors who are
neither officers nor employees of the General Partner or any of its
Affiliates.
"Available Cash" means, with respect to any Quarter and without
duplication:
(a) the sum of:
(i) all cash receipts of the Partnership during such Quarter
from all sources (including, without limitation, distributions of
cash received from the Operating Partnership and cash proceeds
from Interim Capital Transactions, but excluding cash proceeds
from Termination Capital Transactions), plus, in the case of the
Quarter ending October 31, 1994, the cash balance of the
Partnership as of the close of business on the Initial Closing
Date; and
(ii) any reduction with respect to such Quarter in a cash
reserve previously established pursuant to clause (b)(ii) below
(either by reversal or utilization) from the level of such
reserve at the end of the prior Quarter;
(b) less the sum of:
(i) all cash disbursements of the Partnership during such
Quarter, including, without limitation, disbursements for
operating expenses, taxes, if any, debt service (including,
without limitation, the payment of principal, premium and
interest), redemption of Partnership Interests, capital
expenditures, contributions, if any, to the Operating Partnership
and cash distributions to Partners (but only to the extent that
such cash distributions to Partners exceed Available Cash for the
immediately preceding Quarter); and
(ii) any cash reserves established with respect to such
Quarter, and any increase with respect to such Quarter in a cash
reserve previously established pursuant to this clause (b)(ii)
from the level of such reserve at the end of the prior Quarter,
in such amounts as the General Partner determines in its
reasonable discretion to be necessary or appropriate (A) to
provide for the proper conduct of the business of the Partnership
or the Operating Partnership (including, without limitation,
reserves for future capital expenditures), (B) to provide funds
for distributions with respect to Units in respect of any one or
more of the next four Quarters provided, however, that for so
long as any Senior Units are Outstanding, the General Partner may
not establish cash reserves for distributions pursuant to
Sections 5.4(a)(ii) through (a)(vii), 5.4(b)(ii) through (b)(iv),
5.4(c)(ii), 5.4(c)(iii) or 5.4(d)(ii) through (d)(vi) unless the
General Partner has determined that in its judgment the
establishment of such reserves will not prevent the Partnership
from making distributions pursuant to Sections 5.4(a)(i),
5.4(b)(i), 5.4(c)(i) or 5.4(d)(i), as applicable, with respect to
the four Quarters next following the date on which such cash
reserves are to be so established or (C) because the distribution
of such amounts 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 or the
Operating Partnership is a party or by which any of them is bound
or its assets are subject; provided, however, that for purposes
of determining Available Cash for the Quarter ending October 31,
1994, such Quarter shall be deemed to have commenced on the
Initial Closing Date.
8
Notwithstanding the foregoing, "Available Cash" with respect to any Quarter
shall not include any cash receipts or reductions in reserves or take into
account any disbursements made or reserves established in each case after the
Liquidation Date. Taxes paid by the Partnership on behalf of, or amounts
withheld with respect to, all or less than all of the Partners shall not be
considered cash disbursements of the Partnership that reduce Available Cash, but
the payment or withholding thereof shall be deemed to be a distribution of
Available Cash to the Partners other than the Limited Partners holding Senior
Units. Alternatively, in the discretion of the General Partner, such taxes (if
pertaining to all Partners) may be considered to be cash disbursements of the
Partnership which reduce Available Cash, but the payment or withholding thereof
shall not be deemed to be a distribution of Available Cash to such Partners.
Notwithstanding the foregoing, the payment of taxes by the Partnership on behalf
of Limited Partners holding Senior Units will not satisfy the obligation of the
Partnership to pay the Senior Unit Distribution.
"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
4.5 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 or the
states of New York or Missouri shall not be regarded as a Business Day.
"Capital Account" means the capital account maintained for a Partner
pursuant to Section 4.5.
"Capital Additions and Improvements" means (a) additions or improvements to
the capital assets owned by the Partnership or the Operating Partnership or (b)
the acquisition of existing or the construction of new capital assets
(including, without limitation, retail distribution outlets, propane tanks,
pipeline systems, storage facilities and related assets), made to increase the
operating capacity of the Partnership and the Operating Partnership, taken as a
whole, from the operating capacity of the Partnership and the Operating
Partnership, taken as a whole, existing immediately prior to such addition,
improvement, acquisition or construction.
9
"Capital Contribution" means any cash, cash equivalents or the Net Agreed
Value of Contributed Property that a Partner contributes to the Partnership
pursuant to the Contribution Agreement or Sections 4.1, 4.2, 4.3, 13.3(c) or
14.8.
"Capital Interests" means, with respect to any corporation, any and all
shares, participations, rights or other equivalent interests in the capital of
the corporation, and with respect to any partnership, any and all partnership
interests (whether general or limited) and any other interests or participations
that confer on a Person the right to receive a share of the profits and losses
of, or distributions of assets of, such partnership.
"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' and
Assignees' 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 4.5(d)(i) and 4.5(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 General
Partner.
"Cash from Interim Capital Transactions" means, at any date, such amounts
of Available Cash as are deemed to be Cash from Interim Capital Transactions
pursuant to Section 5.3.
"Cash from Operations" means, at the close of any Quarter but prior to the
Liquidation Date, on a cumulative basis and without duplication,
(a) the sum of all cash receipts of the Partnership and the Operating
Partnership during the period since the Initial Closing Date through such
date (including, without limitation, the cash balance of the Partnership as
of the close of business on the Initial Closing Date, plus an initial
balance of $25 million, excluding any cash proceeds from any Interim
Capital Transactions (except to the extent specified in Section 5.3) and
Termination Capital Transactions),
(b) less the sum of:
(i) all cash operating expenditures of the Partnership and the
Operating Partnership during such period, including, without
limitation, taxes, if any, and amounts owed to the General Partner as
reimbursement pursuant to Section 6.4,
(ii) all cash debt service payments of the Partnership and the
Operating Partnership during such period (other than payments or
prepayments of principal and premium (A) required by reason of loan
agreements (including, without limitation, covenants and default
provisions therein) or by lenders, in each case in connection with
sales or other dispositions of assets or (B) made in connection with
refinancings or refundings of indebtedness with the proceeds from new
indebtedness or from the sale of equity interests, provided, that any
payment or prepayment of principal and premium, whether or not then
due, shall be deemed, at the election and in the discretion of the
General Partner, to be refunded or refinanced by any indebtedness
incurred or to be incurred by the Partnership or the Operating
Partnership simultaneously with or within 180 days prior to or after
such payment or prepayment to the extent of the principal amount of
such indebtedness so incurred),
10
(iii) all cash capital expenditures of the Partnership and the
Operating Partnership during such period, including, without
limitation, cash capital expenditures made in respect of Maintenance
Capital Expenditures, but excluding (A) cash capital expenditures made
in respect of Acquisitions and Capital Additions and Improvements and
(B) cash expenditures made in payment of transaction expenses relating
to Interim Capital Transactions,
(iv) any cash reserves of the Partnership or the Operating
Partnership outstanding as of such date that the General Partner deems
in its reasonable discretion to be necessary or appropriate to provide
for the future cash payment of items of the type referred to in
clauses (i) through (iii) of this sentence, and
(v) any cash reserves of the Partnership or the Operating
Partnership outstanding as of such date that the General Partner deems
in its reasonable discretion to be necessary or appropriate to provide
funds for distributions with respect to Units in respect of any one or
more of the next four Quarters,
all as determined on a consolidated basis and after taking into account the
General Partner's interest therein attributable to its general partner interest
in the Operating Partnership. Where cash capital expenditures are made in part
in respect of Acquisitions or Capital Additions and Improvements and in part for
other purposes, the General Partner's good faith allocation thereof between the
portion made for Acquisitions or Capital Additions and Improvements and the
portion made for other purposes shall be conclusive. Taxes paid by the
Partnership on behalf of, or amounts withheld with respect to, all or less than
all of the Partners shall not be considered cash operating expenditures of the
Partnership that reduce Cash from Operations, but the payment or withholding
thereof shall be deemed to be a distribution of Available Cash to such Partners.
Alternatively, in the discretion of the General Partner, such taxes (if
pertaining to all Partners) may be considered to be cash operating expenditures
of the Partnership which reduce Cash from Operations, but the payment or
withholding thereof shall not be deemed to be a distribution of Available Cash
to such Partners.
"Cause" means a court of competent jurisdiction has entered a final,
non-appealable judgment finding the General Partner liable for actual fraud,
gross negligence or willful or wanton misconduct in its capacity as general
partner of the Partnership.
11
"Ceiling Quarterly Distribution" means the highest distribution per Quarter
made for any of the immediately preceding four Quarters per Common Unit (other
than an FCI Common Unit) pursuant to Section 5.4, or if the Cumulative FCI
Common Unit Arrearage is equal to zero (determined after giving the effect to
the application of Section 5.4 for the current Quarter), then the distribution
to be made for the current Quarter per Common Unit as declared by the General
Partner; provided, however, that in no case may the Ceiling Quarterly
Distribution be less than the Minimum Quarterly Distribution.
"Certificate" means a certificate (a) substantially in the form of Exhibit
A to this Agreement with respect to the Common Units, (b) substantially in the
form of Exhibit B to this Agreement with respect to the Senior Units, (c) issued
in global or book-entry form in accordance with the rules and regulations of the
Depository, or (d) in such other form as may be adopted by the General Partner
in its sole discretion, issued by the Partnership evidencing ownership of one or
more Common Units or Senior Units, as the case may be, or a certificate, in such
form as may be adopted by the General Partner in its sole discretion, issued by
the Partnership evidencing ownership of one or more other Units.
"Certificate of Limited Partnership" means the Certificate of Limited
Partnership filed with the Secretary of State of the State of Delaware as
referenced in Section 6.2, as such Certificate of Limited Partnership may be
amended, supplemented or restated from time to time.
"Change of Control" means (a) the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Partnership or the
Operating Partnership to any Person or group (as such term is used in Section
13(d)(3) of the Exchange Act) other than Xxxxx X. Xxxxxxx, the Related Parties
and any Person of which Xxxxx X. Xxxxxxx and the Related Parties beneficially
own in the aggregate 51% or more of the outstanding voting stock (or if such
Person is a partnership, 51% or more of the general partner interests), (b) the
liquidation or dissolution of the Partnership, the Operating Partnership or the
General Partner, (c) the occurrence of any transaction, the result of which is
that Xxxxx X. Xxxxxxx and the Related Parties beneficially own in the aggregate,
directly or indirectly, less than 51% of the outstanding voting stock entitled
to vote for the election of directors of the General Partner and (d) the
occurrence of any transaction, the result of which is that the General Partner
is no longer the sole general partner of the Partnership or the Operating
Partnership.
"Citizenship Certification" means a properly completed certificate in such
form as may be specified by the General Partner by which an Assignee or a
Limited Partner certifies that he (and if he is a nominee holding for the
account of another Person, that to the best of his knowledge such other Person)
is an Eligible Citizen.
"Closing Price" for any day means the last sale price on such day, regular
way, or in case no such sale takes place on such day, the average of the closing
bid and asked prices on such day, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal National Securities Exchange on which the Units of such
class are listed or admitted to trading or, if the Units of such class are not
listed or admitted to trading on any National Securities Exchange, the last
quoted price on such day or, if not so quoted, the average of the high bid and
low asked prices on such day in the over the counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System or
such other system then in use, or if on any such day the Units of such class are
not quoted by any such organization, the average of the closing bid and asked
prices on such day as furnished by a professional market maker making a market
in the Units of such class selected by the Board of Directors of the General
Partner, or if on any such day no market maker is making a market in the Units
of such class, the fair value of such Units on such day as determined reasonably
and in good faith by the Board of Directors of the General Partner.
12
"Code" means the Internal Revenue Code of 1986, as amended and in effect
from time to time, as interpreted by the applicable regulations thereunder. 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.
"Combined Interest" has the meaning assigned to such term in Section
13.3(a).
"Commission" means the Securities and Exchange Commission.
"Common Unit" means a Unit representing a fractional part of the
Partnership Interests of all Limited Partners and Assignees and having the
rights and obligations specified with respect to Common Units in this Agreement.
The term "Common Unit" shall specifically include all FCI Common Units and,
except with respect to certain allocations and distributions to the extent
specified in Article V or pursuant to Section 15.14(a), the FCI Common Units
shall not be treated as a separate class or series of Units or Partnership
Securities from other Common Units under any provision of this Agreement,
specifically including, but not limited to, any voting purpose, right or
privilege.
"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 4.5(d), such property shall no longer constitute a
Contributed Property, but shall be deemed an Adjusted Property.
"Contribution Agreement" means that certain Contribution, Conveyance and
Assumption Agreement, dated as of the Initial Closing Date, between Ferrellgas,
the Partnership and the Operating Partnership, together with the additional
conveyance documents and instruments contemplated or referenced thereunder.
"Cumulative FCI Common Unit Arrearage" means, with respect to all FCI
Common Units, whenever issued, and as of the end of any Quarter, the excess, if
any, of (a) the sum resulting from adding together the FCI Common Unit Arrearage
as to all FCI Common Units for each of the Quarters within the Arrearage Period
including the current Quarter over (b) the sum of any distributions theretofore
made pursuant to Sections 5.4(b)(iv) and 5.4(c)(iii) with respect to such FCI
Common Units (determined after giving effect to any distributions to be made in
the current Quarter).
13
"Curative Allocation" means any allocation of an item of income, gain,
deduction, loss or credit pursuant to the provisions of Section 5.1(d)(xi).
"Current Market Price" as of any date of any class of Units listed or
admitted to trading on any National Securities Exchange means the average of the
daily Closing Prices per Unit of such class for the 20 consecutive Trading Days
immediately prior to such date.
"Delaware Act" means the Delaware Revised Uniform Limited Partnership Act,
6 Del X.xx. 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 13.1 or 13.2.
"Depositary" means with respect to any Units issued in global or book-entry
form, The Depository Trust Company and its successors and permitted assigns.
"Economic Risk of Loss" has the meaning set forth in Treasury Regulation
Section 1.752-2(a).
"Eligible Citizen" means a Person qualified to own interests in real
property in jurisdictions in which the Partnership or the Operating Partnership
does business or proposes to do business from time to time, and whose status as
a Limited Partner or Assignee does not or would not subject the Partnership or
the Operating Partnership to a substantial risk of cancellation or forfeiture of
any of its properties or any interest therein.
"Event of Withdrawal" has the meaning assigned to such term in Section
13.1(a).
"FCI" means Xxxxxxx Companies, Inc., a Kansas corporation.
"FCI Common Unit" means any Common Units beneficially owned by FCI or the
last FCI Common Unit owned by another holder specified in Section 4.5(c). Any
FCI Common Unit Outstanding and no longer beneficially owned by FCI (other than
the last FCI Common Unit specified in Section 4.5(c)) shall have, as a
substantive manner in the hands of a subsequent holder like intrinsic economic
and federal income tax characteristics in all material respects, to the
intrinsic economic and federal income tax characteristics of a Common Unit then
Outstanding.
"FCI Common Unit Arrearage" means, with respect to any FCI Common Unit and
as to each Quarter within the Arrearage Period, the excess, if any, of (a) the
sum of all Available Cash distributed for that Quarter with respect to a Common
Unit (other than an FCI Common Unit) then Outstanding pursuant to Sections
5.4(a)(ii) through 5.4(a)(vi) or Section 5.4(b)(ii), as applicable, over (b) the
sum of all Available Cash distributed for that Quarter with respect to an FCI
Common Unit pursuant to Section 5.4(a)(vii) or Section 5.4(b)(iii), as
applicable.
14
"FCI ESOT" means the employee stock ownership trust related to the employee
stock ownership plan of FCI organized under Section 4975(e)(7) of the Code.
"Ferrellgas" means Ferrellgas, Inc., a Delaware corporation and a wholly
owned subsidiary of FCI.
"First Liquidation Target Amount" has the meaning assigned to such term in
Section 5.1(c)(i)(D).
"First Target Distribution" means $0.55 per Unit (or, with respect to the
period commencing on the Initial Closing Date and ending on October 31, 1994,
the product of $0.55 multiplied by a fraction of which the numerator is the
number of days in such period and of which the denominator is 92), subject to
adjustment in accordance with Sections 5.6(b) and (c) and Section 9.6.
"General Partner" means Ferrellgas, and its successors as general partner
of the Partnership.
"General Partner Interest" means the ownership interest of the General
Partner in the Partnership (in its capacity as a general partner without
reference to any other Partnership Interests in the Partnership held by it)
which is evidenced by General Partner Units and includes any and all benefits to
which the General Partner is entitled as provided in this Agreement, together
with all obligations of the General Partner to comply with the terms and
provisions of this Agreement.
"General Partner Unit" means a Unit representing a fractional part of the
General Partner Interest and having the rights and obligations specified with
respect to the General Partner Units in this Agreement.
"Group" means a Person that with or through any of its Affiliates or
Associates has any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting (except voting pursuant to a revocable proxy or
consent given to such Person in response to a proxy or consent solicitation made
to 10 or more Persons) or disposing of any Partnership Securities with any other
Person that beneficially owns, or whose Affiliates or Associates beneficially
own, directly or indirectly, Partnership Interests.
"Holder" has the meaning assigned to such term in Section 6.13(a).
"IDR" means a Partnership Interest issued to Ferrellgas in connection with
the transfer of its assets to the Partnership pursuant to Section 4.2, which
Partnership Interest shall confer upon the holder thereof only the rights and
obligations specifically provided in this Agreement with respect to IDRs (and no
other rights otherwise available to holders of a Partnership Interest).
15
"Incentive Distribution" means any amount of cash distributed to the
Special Limited Partners, pursuant to Section 5.4.
"Indemnified Persons" has the meaning assigned to such term in Section
6.13(c).
"Indemnitee" means the General Partner, any Departing Partner, any Person
who is or was an Affiliate of the General Partner or any Departing Partner, any
Person who is or was an officer, director, employee, partner, agent or trustee
of the General Partner or any Departing Partner or any such Affiliate, or any
Person who is or was serving at the request of the General Partner or any
Departing Partner or any such Affiliate as a director, officer, employee,
partner, agent or trustee of another Person.
"Information Statement Period" means the period that commences on the
mailing of an Information Statement to the holders of the Common Units (other
than the FCI Common Units) that informs those holders of FCI's consent to the
addition of Sections 5.4(a), (b) and (c), which period ends twenty (20) days
after the commencement of the mailing.
"Initial Closing Date" means July 5, 1994.
"Initial Limited Partners" means Ferrellgas (with respect to the Common
Units it owned) and the Underwriters.
"Initial Offering" means the initial offering and sale of Common Units to
the public, as described in the Registration Statement.
"Initial Unit Price" means (a) with respect to the Common Units, $21.00 or
(b) with respect to any other class or series of Units, the price per Unit at
which such class or series of Units is initially sold by the Partnership, as
determined by the General Partner, in each case adjusted as the General Partner
determines to be appropriate to give effect to any distribution, subdivision or
combination of Units.
"Interim Capital Transactions" means (a) borrowings, refinancings or
refundings of indebtedness and sales of debt securities (other than for working
capital purposes and other than for items purchased on open account in the
ordinary course of business) by the Partnership or the Operating Partnership,
(b) sales of equity interests (including Common Units sold to the Underwriters
pursuant to the exercise of the Overallotment Option) by the Partnership or the
Operating Partnership and (c) sales or other voluntary or involuntary
dispositions of any assets of the Partnership or the Operating Partnership
(other than (x) sales or other dispositions of inventory in the ordinary course
of business, (y) sales or other dispositions of other current assets including,
without limitation, receivables and accounts and (z) sales or other dispositions
of assets as a part of normal retirements or replacements), in each case prior
to the commencement of the dissolution and liquidation of the Partnership.
"Issue Price" means the price at which a Unit is purchased from the
Partnership, less any sales commission or underwriting discount charged to the
Partnership.
16
"Limited Partner" means, unless the context otherwise requires, (a) each
Initial Limited Partner, 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 13.3, subject to the
provisions of Section 5.7, (b) solely for the purposes of Section 1.4 and
Articles VI and VII, each Special Limited Partner and (c) solely for purposes of
Articles IV, V and VI and Sections 14.3 and 14.4, each Assignee.
"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 14.2, the date on which the applicable time period
during which the holders of Outstanding Units 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 the General Partner or other Person approved pursuant to
Section 14.3 who performs the functions described therein.
"Maintenance Capital Expenditures" means cash capital expenditures made to
maintain, up to the level thereof that existed at the time of such expenditure,
the operating capacity of the capital assets of the Partnership and the
Operating Partnership, taken as a whole, as such assets existed at the time of
such expenditure and shall, therefore, not include cash capital expenditures
made in respect of Acquisitions and Capital Additions and Improvements. Where
cash capital expenditures are made in part to maintain the operating capacity
level referred to in the immediately preceding sentence and in part for other
purposes, the General Partner's good faith allocation thereof between the
portion used to maintain such operating capacity level and the portion used for
other purposes shall be conclusive.
"Material Event" means the occurrence of any of the following events while
any Senior Units are owned by The Xxxxxxxx Companies, Inc. or owned directly or
indirectly by Xxxxx X. Xxxxxxx or any Related Party: (a) a Change of Control;
(b) the Partnership or the Operating Partnership is treated as an association
taxable as a corporation for federal income tax purposes or is otherwise subject
to taxation as an entity for federal income tax purposes; (c) the Partnership
issues any Partnership Interests for cash prior to December 31, 2005 (other than
issuances pursuant to the Ferrellgas, Inc. Unit Option Plan) and the first $40
million of the aggregate proceeds of such issuances are not used to redeem the
Senior Units; (d) the Partnership issues any Partnership Interests for cash
prior to December 31, 2005, and the aggregate proceeds of such issuances above
the amount specified in clause (c) are not used to redeem the Senior Units
(other than (i) issuances pursuant to the Ferrellgas, Inc. Unit Option Plan and
(ii) up to $20 million of the aggregate proceeds of such issuances used to
reduce indebtedness or other off-balance sheet credit facilities of the
Partnership or the Operating Partnership); or (e) the Partnership fails to pay
the Senior Unit Distribution in full for any Quarter.
"Merger Agreement" has the meaning assigned to such term in Section 16.1.
17
"Minimum Quarterly Distribution" means $0.50 per Common Unit per Quarter
(or, with respect to the period commencing on the Initial Closing Date and
ending on October 31, 1994, the product of $0.55 multiplied by a fraction of
which the numerator is the number of days in such period and of which the
denominator is 92), subject to adjustment in accordance with Sections 5.6(b) and
(c) and Section 9.6.
"National Securities Exchange" means an exchange registered with the
Securities and Exchange Commission under Section 6(a) of the Securities Exchange
Act of 1934, as amended, supplemented or restated from time to time, and any
successor to such statute.
"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 or
Assignee by the Partnership, the Partnership's Carrying Value of such property
(as adjusted pursuant to Section 4.5(d)(ii)) at the time such property is
distributed, reduced by any indebtedness either assumed by such Partner or
Assignee 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 period, the excess, if any, of the
Partnership's items of income and gain (other than those items attributable to
dispositions constituting Termination Capital Transactions) for such taxable
period over the Partnership's items of loss and deduction (other than those
items attributable to dispositions constituting Termination Capital
Transactions) for such taxable period. The items included in the calculation of
Net Income shall be determined in accordance with Section 4.5(b) and shall not
include any items specially allocated under Section 5.1(d). Once an item of
income, gain, loss or deduction that has been included in the initial
computation of Net Income is subjected to a Required Allocation or a Curative
Allocation, Net Income or Net Loss, whichever the case may be, shall be
recomputed without regard to such item.
"Net Loss" means, for any taxable period, the excess, if any, of the
Partnership's items of loss and deduction (other than those items attributable
to dispositions constituting Termination Capital Transactions) for such taxable
period over the Partnership's items of income and gain (other than those items
attributable to dispositions constituting Termination Capital Transactions) for
such taxable period. The items included in the calculation of Net Loss shall be
determined in accordance with Section 4.5(b) and shall not include any items
specially allocated under Section 5.1(d). Once an item of income, gain, loss or
deduction that has been included in the initial computation of Net Loss is
subjected to a Required Allocation or a Curative Allocation, Net Income, or Net
Loss, whichever the case may be, shall be recomputed without regard to such
item.
"Net Termination Gain" means, for any taxable period, the sum, if positive,
of all items of income, gain, loss or deduction recognized by the Partnership
(including, without limitation, such amounts recognized through the Operating
Partnership) from Termination Capital Transactions occurring in such taxable
period. The items included in the determination of Net Termination Gain shall be
determined in accordance with Section 4.5(b) and shall not include any items of
income, gain or loss specially allocated under Section 5.1(d). Once an item of
income, gain or loss that has been included in the initial computation of Net
Termination Gain is subjected to a Required Allocation or a Curative Allocation,
Net Termination Gain or Net Termination Loss, whichever the case may be, shall
be recomputed without regard to such item.
18
"Net Termination Loss" means, for any taxable period, the sum, if negative,
of all items of income, gain, loss or deduction recognized by the Partnership
(including, without limitation, such amounts recognized through the Operating
Partnership) from Termination Capital Transactions occurring in such taxable
period. The items included in the determination of Net Termination Loss shall be
determined in accordance with Section 4.5(b) and shall not include any items of
income, gain or loss specially allocated under Section 5.1(d). Once an item of
gain or loss that has been included in the initial computation of Net
Termination Loss is subjected to a Required Allocation or a Curative Allocation,
Net Termination Gain or Net Termination Loss, whichever the case may be, shall
be recomputed without regard to such item.
"Non-citizen Assignee" means a Person who the General Partner has
determined in its sole discretion does not constitute an Eligible Citizen and as
to whose Partnership Interest the General Partner has become the Substituted
Limited Partner, pursuant to Section 11.5.
"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 5.2(b)(i)(A), 5.2(b)(ii)(A) or
5.2(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 (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).
"Notice of Election to Purchase" has the meaning assigned to such term in
Section 17.1(b).
"Operating Partnership" means Ferrellgas, L.P., a Delaware limited
partnership.
"Operating Partnership Agreement" means the Agreement of Limited
Partnership of the Operating Partnership, as it may be amended, supplemented or
restated from time to time.
19
"Opinion of Counsel" means a written opinion of counsel (who may be regular
counsel to Ferrellgas, any Affiliate of Ferrellgas, the Partnership or the
General Partner) acceptable to the General Partner.
"Original Agreement" has the meaning assigned to such term in the recitals
hereto.
"Outstanding" means, with respect to the Units or other Partnership
Securities, all Units or other Partnership Securities that are issued by the
Partnership and reflected as outstanding on the Partnership's books and records
as of the date of determination; provided that, if at any time any Person or
Group (other than Ferrellgas, its Affiliates and except as provided below) owns
beneficially 20% or more of all Common Units, such Common Units so owned shall
not be voted on any matter and shall not be considered to be Outstanding when
sending notices of a meeting of Limited Partners (unless otherwise required by
law), calculating required votes, determining the presence of a quorum or for
other similar purposes under this Agreement, except that such Common Units shall
be considered to be Outstanding for purposes of Section 13.1(b)(iv) (such Common
Units shall not, however, be treated as a separate class or series of
Partnership Securities for purposes of this Agreement). Notwithstanding the
above, the Common Units issued upon conversion of the Senior Units, so long as
such Common Units are held by WNGL, its successors, directly or indirectly by
The Xxxxxxxx Companies, Inc. or directly or indirectly by Xxxxx X. Xxxxxxx or
any Related Party (1) shall at all times be considered Outstanding for purposes
of this Agreement and have all rights specified with respect to Common Units in
this Agreement and (2) shall be included with any other Common Units in
determining whether WNGL, its successors, The Xxxxxxxx Companies, Inc., Xxxxx X.
Xxxxxxx or any Related Party own beneficially 20% or more of all Common Units
with respect to those other Common Units that were not converted from Senior
Units.
"Overallotment Option" means the overallotment option granted to the
Underwriters by the Partnership pursuant to the Underwriting Agreement.
"Partners" means the General Partner, the Limited Partners and the Special
Limited Partners.
"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.
20
"Partnership" means Ferrellgas Partners, L.P., a Delaware limited
partnership established by the Certificate of Limited Partnership, and any
successors thereto.
"Partnership Interest" means an interest in the Partnership, which shall
include General Partner Units, Senior Units, Common Units, IDRs or other
Partnership Securities, or a combination thereof or interest therein, as the
case may be.
"Partnership Minimum Gain" means that amount determined in accordance with
the principles of Treasury Regulation Section 1.704-2(d).
"Partnership Securities" has the meaning assigned to such term in Section
4.3(a).
"Per Unit Capital Amount" means, as of any date of determination, the
Capital Account, stated on a per Unit basis, underlying any Unit held by a
Person.
"Percentage Interest" means as of the date of such determination (a) as to
any Partner or Assignee holding Units, the product of (i) 100% less the
percentage applicable to clause (b) multiplied by (ii) the quotient of the
number of Units held by such Partner or Assignee divided by the total number of
all Outstanding Units (other than Senior Units), and (b) as to the holders of
additional Partnership Securities issued by the Partnership in accordance with
Section 4.3, the percentage established as a part of such issuance. The Senior
Units have not been allocated a Percentage Interest.
"Person" means an individual or a corporation, partnership, trust,
unincorporated organization, association or other entity.
"Pro Rata" means (a) when modifying Units or any class thereof, apportioned
equally among all designated Units or class thereof in accordance with their
relative Percentage Interests, (b) when modifying Partners and Assignees,
apportioned among all Partners and Assignees in accordance with their relative
Percentage Interests, and (c) when modifying holders of IDRs, apportioned
equally among all holders of IDRs in accordance with the relative number of IDRs
held by such holder.
"Purchase Date" means the date determined by the General Partner as the
date for purchase of all Outstanding Units (other than Units owned by the
General Partner and its Affiliates) pursuant to Article XVII.
"Quarter" means, unless the context requires otherwise, a three month
period of time ending on October 31, January 31, April 30, or July 31; provided,
however, that the General Partner, in its sole discretion, may amend such period
as it deems necessary or appropriate in connection with a change in the fiscal
year of the Partnership.
"Recapture Income" means any gain recognized by the Partnership (computed
without regard to any adjustment required by Sections 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.
21
"Record Date" means the date established by the General Partner for
determining (a) the identity of the Record Holder entitled to notice of, or to
vote at, any meeting of Limited Partners or entitled to vote by ballot or give
approval of Partnership action in writing without a meeting or entitled to
exercise rights in respect of any lawful action of Limited Partners or (b) the
identity of Record Holders entitled to receive any report or distribution.
"Record Holder" means the Person in whose name a Unit is registered on the
books of the Transfer Agent as of the opening of business on a particular
Business Day, or with respect to a holder of a General Partner Unit or an IDR,
the Person in whose name such General Partner Unit or IDR is registered on the
books which the General Partner has caused to be kept as of the opening of
business on such Business Day.
"Redeemable Units" means any Units for which a redemption notice has been
given, and has not been withdrawn, under Section 11.6.
"Registration Statement" means the Registration Statement on Form S-1
(Registration No. 33-53383), as it has been or as it may be amended or
supplemented from time to time, filed by the Partnership with the Commission
under the Securities Act to register the offering and sale of the Common Units
in the Initial Offering.
"Related Party" means (a) the spouse or any lineal descendant of Xxxxx X.
Xxxxxxx, (b) any trust for his benefit or for the benefit of his spouse or any
such lineal descendants, (c) any corporation, partnership or other entity in
which Xxxxx X. Xxxxxxx and/or such other Persons referred to in the foregoing
clauses (a) and (b) are the direct record and beneficial owners of all of the
voting and nonvoting securities, (d) the FCI ESOT and (e) any participant in the
FCI ESOT whose ESOT account has been allocated shares of FCI.
"Required Allocations" means any allocation (or limitation imposed on any
allocation) of an item of income, gain, deduction or loss pursuant to (a)
Section 5.1(b)(ii) or (b) Sections 5.1(d)(i), 5.1(d)(ii), 5.1(d)(iv), 5.1(d)(v),
5.1(d)(vi), 5.1(d)(vii) and 5.1(d)(ix), such allocations (or limitations
thereon) being directly or indirectly required by the Treasury Regulations
promulgated under Section 704(b) of the Code.
"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 Sections 5.2(b)(i)(A) or 5.2(b)(ii)(A), respectively, to eliminate
Book-Tax Disparities.
"Restricted Activities" means the retail sale of propane to end users
within the continental United States in the manner engaged in by Ferrellgas
immediately prior to the Initial Closing Date.
"Second Amended and Restated Agreement" has the meaning assigned to such
term in the recitals hereto.
22
"Second Liquidation Target Amount" has the meaning assigned to such term in
Section 5.1(c)(i)(E).
"Second Target Distribution" means $0.63 per Unit (or, with respect to the
period commencing on the Initial Closing Date and ending on October 31, 1994,
the product of $0.55 multiplied by a fraction of which the numerator is the
number of days in such period and of which the denominator is 92), subject to
adjustment in accordance with Sections 5.6(b) and (c) and Section 9.6.
"Securities Act" means the Securities Act of 1933, as amended, supplemented
or restated from time to time and any successor to such statute.
"Senior Unit" means a Unit representing a fractional part of the
Partnership Interests of all Limited Partners and Assignees having the rights
and obligations specified with respect to Senior Units in this Agreement. The
term "Senior Unit" includes all Additional Senior Units.
"Senior Unit Distribution" means distributions that are required to be paid
on the Senior Units (including Additional Senior Units) at a quarterly rate
equal to the sum of (a) $1.00 per Senior Unit per Quarter (or part thereof or,
with respect to the period commencing with the WNGL Closing Date and ending on
January 31, 2000, the product of $1.00 multiplied by a fraction of which the
numerator is the number of days in such period and of which the denominator is
92), plus (b) an additional $0.50 per Senior Unit per Quarter (or part thereof)
if the Partnership fails to pay in full the Senior Unit Redemption Price on or
prior to the Senior Unit Redemption Date, in each case accumulating from and
including the date of such failure or default in clause (b) until the date such
failure or default has been cured by the Partnership. Each of the amounts set
forth in clauses (a) and (b) are subject to adjustment in accordance with
Section 5.6(a).
All Senior Unit Distributions shall be cumulative, whether or not declared
and whether or not there is sufficient Available Cash for the payment thereof,
on a daily basis from the WNGL Closing Date and shall be payable quarterly in
arrears on each distribution payment date pursuant to Section 5.3(a), commencing
on the first distribution payment date after the WNGL Closing Date. Any unpaid
or undistributed Senior Unit Distributions will compound on a quarterly basis at
a rate equal to the then applicable distribution rate, calculated in accordance
with the first sentence of this definition. If any Senior Unit Distributions are
payable through the issuance of Additional Senior Units pursuant to Section 5.4
and are so paid by such issuance, such Senior Unit Distributions shall be deemed
paid in full. Any Additional Senior Units that are required to be issued and
distributed, but which are not issued and distributed as required, will be
entitled to the Senior Unit Distribution as if they were issued and distributed
as required.
"Senior Unit Liquidation Preference" means $40.00 per Senior Unit, subject
to adjustment in accordance with Section 5.6(a).
"Senior Unit Redemption Date" means the date the Partnership shall pay the
Senior Unit Redemption Price to the holders of Senior Units pursuant to Section
17.2(b).
23
"Senior Unit Redemption Notice" means a written notice from the Partnership
to the holder or holders of Senior Units setting forth:
(a) the Senior Unit Redemption Price;
(b) whether all or less than all of the Outstanding Senior Units are to be
redeemed and the total number of Senior Units being redeemed;
(c) the Senior Unit Redemption Date;
(d) that the holder is to surrender to the Partnership, in the manner, at
the place or places and at the price designated, his certificate or
certificates representing the Senior Units to be redeemed; and
(e) that distributions on the Senior Units to be redeemed shall cease to
accumulate on such Senior Unit Redemption Date unless the Partnership
defaults in the payment of the redemption price.
"Senior Unit Redemption Price" means, with respect to each Senior Unit
called for redemption in accordance with the Senior Unit Redemption Notice
pursuant to Section 17.2(b), an amount in cash equal to the Senior Unit
Liquidation Preference, plus an amount equal to any accumulated and unpaid
Senior Unit Distributions on such Senior Units to the Senior Unit Redemption
Date.
"Special Approval" means approval by the Audit Committee.
"Special Limited Partner" means each holder of an IDR.
"Special Limited Partners Book Capital" means, as of any date of
determination, the amount equal to the sum of the balances of the Capital
Accounts of all the Special Limited Partners, determined pursuant to Section 4.5
(prior to any adjustment pursuant to Section 4.5(d) arising upon the present
event requiring a valuation of the Partnership's assets).
"Subordinated Unit" means a Unit representing a fractional part of the
Partnership Interests of all Limited Partners and Assignees and having the
rights and obligations specified with respect to Subordinated Units in the
Original Agreement. Each Outstanding Subordinated Unit converted into a Common
Unit on a one-for-one basis as of August 1, 1999.
"Subordination Period" means the period which commenced on the Initial
Closing Date and ended on August 1, 1999.
"Subsidiary" means, with respect to any Person, (i) a corporation of which
more than 50% of the voting power of shares of Capital Interests 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, by such Person, by one or more Subsidiaries of such Person, or a
combination thereof, (ii) 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
Capital Interests of such partnership (considering all of the Capital Interests
of the partnership as a single class) is owned or controlled, directly or
indirectly, by such Person, by one or more Subsidiaries of such Person, or a
combination thereof, or (iii) any other Person (other than a corporation or a
partnership) in which such Person, directly or indirectly, at the date of
determination, has (x) at least a majority ownership interest or (y) the power
to elect or direct the election of a majority of the directors or other
governing body of such Person.
24
"Substituted Limited Partner" means a Person who is admitted as a Limited
Partner to the Partnership pursuant to Section 12.2 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 16.2(b).
"Termination Capital Transactions" means any sale, transfer or other
disposition of property of the Partnership or the Operating Partnership
occurring upon or incident to the liquidation and winding up of the Partnership
and the Operating Partnership pursuant to Article XIV.
"Third Amended and Restated Agreement" has the meaning assigned to such
term in the recitals hereto.
"Third Target Distribution" means $0.82 per Unit (or, with respect to the
period commencing on the Initial Closing Date and ending on October 31, 1994,
the product of $0.55 multiplied by a fraction of which the numerator is the
number of days in such period and of which the denominator is 92), subject to
adjustment in accordance with Sections 5.6(b) and (c) and Section 9.6.
"Trading Day" means a day on which the principal National Securities
Exchange on which the Units of any class are listed or admitted to trading is
open for the transaction of business or, if Units of a class are not listed or
admitted to trading on any National Securities Exchange, a day on which banking
institutions in New York City generally are open.
"Transaction" has the meaning assigned to such term in Section 5.7(g).
"Transfer" has the meaning assigned to such term in Section 11.1(a).
"Transfer Agent" means such bank, trust company or other Person (including,
without limitation, the General Partner or one of its Affiliates) as shall be
appointed from time to time by the Partnership to act as registrar and transfer
agent for the Units.
"Transfer Application" means an application and agreement for transfer of
Units in the form set forth on the back of a Certificate or in a form
substantially to the same effect in a separate instrument.
25
"Underwriter" means each Person named as an underwriter in Schedule I to
the Underwriting Agreement who purchased Common Units pursuant thereto.
"Underwriting Agreement" means the Underwriting Agreement dated June 27,
1994, among the Underwriters, the Partnership, the General Partner and FCI
providing for the purchase of Common Units by such Underwriters.
"Unit" means a Partnership Interest of a Partner or Assignee in the
Partnership representing a fractional part of the Partnership Interests of all
Partners and Assignees and shall include, without limitation, General Partner
Units, Senior Units and Common Units; provided, that each General Partner Unit
at any time Outstanding shall represent the same fractional part of the
Partnership Interests of all Partners and Assignees holding General Partner
Units as each other General Partner Unit, each Senior Unit at any time
Outstanding shall represent the same fractional part of the Partnership
Interests of all Partners and Assignees holding Senior Units as each other
Senior Unit, and each Common Unit at any time Outstanding shall represent the
same fractional part of the Partnership Interests of all Partners and Assignees
holding Common Units as each other Common Unit.
"Unitholders" means the holders of Common Units and General Partner Units
but shall not include holders of Senior Units.
"Unpaid MQD" has the meaning assigned to such term in Section 5.1(c)(i)(C).
"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 4.5(d)) over
(b) the Carrying Value of such property as of such date (prior to any adjustment
to be made pursuant to Section 4.5(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 4.5(d) as of such date) over (b) the fair market value of such property
as of such date (as determined under Section 4.5(d)).
"Unrecovered Initial Unit Price" means, at any time, with respect to a
class or series of Units (other than Senior Units and General Partner Units),
the price per Unit at which such class or series of Units was initially offered
to the public for sale by the underwriters in respect of such offering, as
determined by the General Partner, less the sum of all distributions theretofore
made in respect of a Unit of such class or series that was sold in the initial
offering of Units of said class or series constituting Cash from Interim Capital
Transactions and any distributions of cash (or the Net Agreed Value of any
distributions in kind) in connection with the dissolution and liquidation of the
Partnership theretofore made in respect of a Unit of such class or series that
was sold in the initial offering of Units of such class or series, adjusted as
the General Partner determines to be appropriate to give effect to any
distribution, subdivision or combination of Units.
26
"Withdrawal Opinion of Counsel" has the meaning assigned to such term in
Section 13.1(b).
"WNGL" means Xxxxxxxx Natural Gas Liquids, Inc., a Delaware corporation
"WNGL Closing Date" means the closing date of the transactions contemplated
by the WNGL Purchase Agreement.
"WNGL Purchase Agreement" means that certain Purchase Agreement, dated as
of November 7, 1999, as amended, by and among the Partnership, the Operating
Partnership and WNGL.
"WNGL Registration Rights Agreement" means that certain Registration Rights
Agreement, dated the WNGL Closing Date, as amended, between the Partnership and
WNGL.
ARTICLE III
PURPOSE
-----------
Section 3.1 Purpose and Business. The purpose and nature of the business to
be conducted by the Partnership shall be (a) to serve as a limited partner in
the Operating Partnership and, in connection therewith, to exercise all of the
rights and powers conferred upon the Partnership as a limited partner in the
Operating Partnership pursuant to the Operating Partnership Agreement or
otherwise, (b) to engage directly in, or to enter into or form any corporation,
partnership, joint venture, limited liability company or other arrangement to
engage in, any business activity that the Operating Partnership is permitted to
engage in by the Operating Partnership Agreement 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, (c) to engage directly in,
or to enter into or form any corporation, partnership, joint venture, limited
liability company or other arrangement to engage in, any business activity that
is approved by the General Partner and which lawfully may 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
(d) to do anything necessary or appropriate to the foregoing, including, without
limitation, the making of capital contributions or loans to the Operating
Partnership. The General Partner has no obligation or duty to the Partnership,
the Limited Partners, the Special Limited Partners or the Assignees to propose
or approve, and in its sole discretion may decline to propose or approve, the
conduct by the Partnership of any business.
Section 3.2 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 3.1 and for the protection and benefit of the Partnership.
27
ARTICLE IV
CAPITAL CONTRIBUTIONS
Section 4.1 Initial Contributions. In connection with the formation of the
Partnership under the Delaware Act, the General Partner made an initial Capital
Contribution to the Partnership and was admitted as the general partner of the
Partnership, and the organizational Limited Partner made a Capital Contribution
to the Partnership and was admitted as a limited partner of the Partnership.
Section 4.2 Contributions by the General Partner and the Initial Limited
Partners; Contributions on the WNGL Closing Date and issuance of General Partner
Units.
(a) On the Initial Closing Date, the General Partner contributed and
delivered to the Partnership, as a Capital Contribution, a limited partner
interest in the Operating Partnership which, together with the Partnership
Interest (as defined in the Operating Partnership Agreement) previously
held by the Partnership, represented a 98.9899% Percentage Interest (as
defined in the Operating Partnership Agreement) in the Operating
Partnership, in exchange for (i) the continuation of its Partnership
Interest as general partner in the Partnership, subject to all of the
rights, privileges and duties of the General Partner under this Agreement,
(ii) 1,000,000 Common Units and 16,593,721 Subordinated Units and (iii) the
IDRs.
(b) On the Initial Closing Date, each Underwriter contributed and
delivered to the Partnership cash in an amount equal to the Issue Price per
Common Unit, multiplied by the number of Common Units specified in the
Underwriting Agreement to be purchased by such Underwriter. In exchange for
such Capital Contribution by the Underwriters, the Partnership issued
Common Units to each Underwriter on whose behalf such Capital Contribution
was made in an amount equal to the quotient obtained by dividing (x) the
cash contribution to the Partnership by or on behalf of such Underwriter by
(y) the Issue Price per Common Unit. Immediately after these contributions,
the Initial Capital Contribution of the General Partner and the
organizational Limited Partner were refunded, the interest of the
organizational Limited Partner was terminated and the organizational
Limited Partner ceased to be a Limited Partner.
(c) To the extent that the Underwriters' Overallotment Option was
exercised, each Underwriter contributed and delivered to the Partnership
cash in an amount equal to the Issue Price per Common Unit multiplied by
the number of Common Units purchased by such Underwriter pursuant to the
Overallotment Option. In exchange for such Capital Contribution, the
Partnership issued Common Units to each Underwriter on whose behalf such
Capital Contribution was made in an amount equal to the quotient obtained
by dividing (x) the cash contribution to the Partnership by or on behalf of
such Underwriter by (y) the Issue Price per Common Unit.
(d) On the WNGL Closing Date, pursuant to the WNGL Purchase Agreement,
WNGL contributed all of its interests in Thermogas L.L.C., a Delaware
limited liability company (previously Thermogas Company, a Delaware
corporation), to the Partnership in exchange for 4,375,000 Senior Units.
28
(e) On June 5, 2000, the Partnership issued 316,233 General Partner
Units to represent the General Partner Interest as of that date, which
number is equal to one percent of the quotient of the number of Common
Units then Outstanding divided by ninety-nine percent rounded down to the
nearest whole number of General Partner Units.
(f) Immediately upon the conversion of Senior Units into Common Units
as provided in Section 5.7(b), the Partnership will issue to the General
Partner (for no consideration) that number of General Partner Units which
will cause the Percentage Interest of its General Partner Interest
immediately after such conversion to be equal to the Percentage Interest of
its General Partner Interest immediately prior to such conversion.
(g) If the Partnership issues additional Common Units and uses the
proceeds from that issuance to redeem any of the Senior Units pursuant to
the terms of this Agreement, the Partnership will issue to the General
Partner (for no consideration) that number of General Partner Units equal
to the $1,767,677 Capital Contribution made by the General Partner to the
Partnership at the time of the issuance of the Senior Units divided by the
issuance price of such Common Units. This clause (g) shall not obviate the
provisions of Section 4.3 to the extent those provisions otherwise apply to
that issuance of Common Units.
Section 4.3 Issuances of Additional Units and Other Securities.
(a) Subject to Section 4.3(c), the General Partner is hereby
authorized to cause the Partnership to issue, in addition to the
Partnership Interests and Units issued pursuant to Sections 4.1 and 4.2,
such additional Units (other than General Partner Units), or classes or
series thereof, or options, rights, warrants or appreciation rights
relating thereto, or any other type of equity security that the Partnership
may lawfully issue, any unsecured or secured debt obligations of the
Partnership convertible into any class or series of equity securities of
the Partnership (collectively, "Partnership Securities"), for any
Partnership purpose, at any time or from time to time, to the Partners or
to other Persons for such consideration and on such terms and conditions as
shall be established by the General Partner in its sole discretion, all
without the approval of any Limited Partners. The General Partner shall
have sole discretion, subject to the guidelines set forth in this Section
4.3 and the requirements of the Delaware Act, in determining the
consideration and terms and conditions with respect to any future issuance
of Partnership Securities.
(b) Additional Partnership Securities to be issued by the Partnership
pursuant to this Section 4.3 shall be issuable from time to time in one or
more classes, or one or more series of any of such classes, with such
designations, preferences and relative, participating, optional or other
special rights, powers and duties, including, without limitation, rights,
powers and duties senior to existing classes and series of Partnership
Securities (except as provided in Section 4.3(c)), all as shall be fixed by
the General Partner in the exercise of its sole discretion, subject to
Delaware law and Section 4.3(c), including, without limitation, (i) the
allocations of items of Partnership income, gain, loss, deduction and
credit to each such class or series of Partnership Securities; (ii) the
right of each such class or series of Partnership Securities to share in
Partnership distributions; (iii) the rights of each such class or series of
Partnership Securities upon dissolution and liquidation of the Partnership;
(iv) whether such class or series of additional Partnership Securities is
redeemable by the Partnership and, if so, the price at which, and the terms
and conditions upon which, such class or series of additional Partnership
Securities may be redeemed by the Partnership; (v) whether such class or
series of additional Partnership Securities is issued with the privilege of
conversion and, if so, the rate at which, and the terms and conditions upon
which, such class or series of Partnership Securities may be converted into
any other class or series of Partnership Securities or other property; (vi)
the terms and conditions upon which each such class or series of
Partnership Securities will be issued, evidenced by certificates and
assigned or transferred; and (vii) the right, if any, of each such class or
series of Partnership Securities to vote on Partnership matters, including,
without limitation, matters relating to the relative rights, preferences
and privileges of each such class or series.
29
(c) Notwithstanding the terms of Sections 4.3(a) and 4.3(b), the
issuance by the Partnership of any Partnership Securities pursuant to this
Section 4.3 shall be subject to the following restrictions and limitations:
(i) Except for the issuance of Additional Senior Units pursuant
to Section 5.4, for so long as any Senior Units are Outstanding, the
Partnership shall not create, authorize or issue additional
Partnership Securities (or securities convertible into Partnership
Securities) having distribution rights or liquidation rights ranking
prior or senior to, or on a parity with, the Senior Units, without the
prior approval of the holders of at least a majority of the
Outstanding Senior Units; and
(ii) The General Partner may, at any time, make a Capital
Contribution to the Partnership so that the General Partner will have
made aggregate Capital Contributions equal to at least 1.0% of the
aggregate Capital Contributions of all Partners. Upon the issuance of
any Common Units by the Partnership to any Person, the General
Partner, in its sole discretion, may simultaneously purchase (or may
purchase at any time thereafter as specified below) a number of
General Partner Units only to the extent necessary such that after
taking into account the additional Common Units issued to such Person
and the General Partner Units to be issued to the General Partner
pursuant to this Section 4.3(c)(ii), the General Partner will have a
Percentage Interest of no more than 1.0%. The consideration for the
General Partner Units to be issued to the General Partner shall be the
higher of the price at which the Common Units were issued or, only if
the purchase is not made simultaneously with the issuance of the
Common Units, the Closing Price of the Common Units on the day prior
to the proposed issuance of such General Partner Units;
(d) The General Partner is hereby authorized and directed to take all
actions that it deems necessary or appropriate in connection with each issuance
of Units, IDRs or other Partnership Securities pursuant to Section 4.3(a) and to
amend this Agreement in any manner that it deems necessary or appropriate to
provide for each such issuance, to admit Additional Limited Partners in
connection therewith and to specify the relative rights, powers and duties of
the holders of the Units, IDRs or other Partnership Securities being so issued.
(e) The General Partner shall do all things necessary to comply with the
Delaware Act and is authorized and directed to do all things it deems to be
necessary or advisable in connection with any future issuance of Partnership
Securities, including, without limitation, compliance with any statute, rule,
regulation or guideline of any federal, state or other governmental agency or
any National Securities Exchange on which the Units or other Partnership
Securities are listed for trading.
30
Section 4.4 Limited Preemptive Rights. Except as provided in this Section
4.4 and Section 4.3, no Person shall have any preemptive, preferential or other
similar right with respect to (a) additional Capital Contributions; (b) issuance
or sale of any class or series of Units, IDRs or other Partnership Securities,
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 Units, IDRs or other Partnership
Securities; (d) issuance of any right of subscription to or right to receive, or
any warrant or option for the purchase of, any such Units, IDRs or other
Partnership Securities; or (e) issuance or sale of any other securities that may
be issued or sold by the Partnership. The General Partner shall have the right,
which it may from time to time assign in whole or in part to any of its
Affiliates, to purchase Units, IDRs or other Partnership Securities from the
Partnership whenever, and on the same terms that, the Partnership issues Units,
IDRs or other Partnership Securities to Persons other than the General Partner
and its Affiliates, to the extent necessary to maintain the Percentage Interests
of the General Partner and its Affiliates equal to that which existed
immediately prior to the issuance of such Units, IDRs or other Partnership
Securities. Notwithstanding the type of Partnership Securities issued by the
Partnership to Persons other than the General Partner and its Affiliates, the
right of the General Partner and its Affiliates to purchase Units, IDRs or other
Partnership Securities pursuant to the immediately preceding sentence may be
exercised through the purchase of General Partner Units (based on a value which
is proportionate to the price for which the Partnership Securities are issued to
such Persons) in an amount necessary to maintain the Percentage Interest of the
General Partner and its Affiliates with respect to the General Partner Interest
equal to that which existed immediately prior to the issuance of Units, IDRs or
other Partnership Securities.
Section 4.5 Capital Accounts.
(a) The Partnership shall maintain for each Partner (or a beneficial owner
of a Partnership Interest held by a nominee in any case in which the nominee has
furnished the identity of such owner to the Partnership in accordance with
Section 6031(c) of the Code or any other method acceptable to the General
Partner in its sole discretion) 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 and (ii)
all items of Partnership income and gain (including, without limitation, income
and gain exempt from tax) computed in accordance with Section 4.5(b) and
allocated with respect to such Partnership Interest pursuant to Section 5.1, and
decreased by (x) the amount of cash or Net Agreed Value of all actual and deemed
distributions of cash or property made with respect to such Partnership Interest
pursuant to this Agreement and (y) all items of Partnership deduction and loss
computed in accordance with Section 4.5(b) and allocated with respect to such
Partnership Interest pursuant to Section 5.1.
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(b) For purposes of computing the amount of any item of income, gain, loss
or deduction 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 4.5, the Partnership shall be
treated as owning directly its proportionate share (as determined by the
General Partner based upon the provisions of the Operating Partnership
Agreements) of all property owned by the Operating Partnership.
(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 5.1.
(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.
(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
4.5(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 General Partner 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
5.1. 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.
32
(c) Subject to the next sentence, 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. Upon the sale, exchange or
other disposition of an FCI Common Unit (other than the last FCI Common Unit
sold, exchanged or otherwise disposed of by FCI) such that the FCI Common Unit
is not beneficially owned by FCI, the Capital Account maintained for FCI shall
(i) first, be allocated to the FCI Common Units to be transferred, as the case
may be, in an amount equal to the product of (x) the number of such FCI Common
Units to be transferred, as the case may be, and (y) the Per Unit Capital Amount
for a Common Unit, and (ii) second, any remaining balance in such Capital
Account will be retained by FCI in its retained Units. With respect to the last
FCI Common Unit to be sold, exchanged or otherwise disposed of by FCI, that FCI
Common Unit shall remain an FCI Common Unit and shall retain the balance of the
applicable Capital Account regardless of the holder thereof.
(d) (i) Consistent with the provisions of Treasury Regulation Section
1.704-1(b)(2)(iv)(f), on an issuance of additional Units for cash or Contributed
Property, the conversion of Senior Units into Common Units pursuant to Section
5.7, or the conversion of the General Partner's Combined Interest to Common
Units pursuant to Section 13.3(b), 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 Sections 5.1(a) and 5.1(b). 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 Units shall be
determined by the General Partner using such reasonable method of valuation as
it may adopt; provided, however, the General Partner, 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 General Partner shall allocate such
aggregate value among the assets of the Partnership (in such manner as it
determines in its sole 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 5.1. Any
Unrealized Gain or Unrealized Loss attributable to such property shall be
allocated in the same manner as Net Termination Gain or Net Termination
Loss pursuant to Section 5.1(c); provided, however, that, in making any
such allocation, Net Termination Gain or Net Termination Loss actually
realized shall be allocated first. 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 be determined and
allocated by the Liquidator using such reasonable method of valuation as it
may adopt.
33
Section 4.6 Interest. No interest shall be paid by the Partnership on
Capital Contributions or on balances in Partners' Capital Accounts.
Section 4.7 No Withdrawal. No Partner shall be entitled to withdraw any
part of its Capital Contributions or its Capital Account or to receive any
distribution from the Partnership, except as provided in Section 4.1, and
Articles V, VII, XIII and XIV.
Section 4.8 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.
Section 4.9 No Fractional Units. Except for fractional Senior Units issued
pursuant to Section 5.4 and Section 4.10(d), no fractional Units shall be issued
by the Partnership.
Section 4.10 Splits and Combinations.
(a) Subject to Section 4.3(c) and 4.10(d), the General Partner may
make a Pro Rata distribution of Units or other Partnership Securities to
all Record Holders or may effect a subdivision or combination of Units or
other Partnership Securities; provided, however, that, after any such
distribution, subdivision or combination, each Partner shall have the same
Percentage Interest in the Partnership as before such distribution,
subdivision or combination.
(b) Whenever such a distribution, subdivision or combination of Units
or other Partnership Securities is declared, the General Partner shall
select a Record Date as of which the distribution, subdivision or
combination shall be effective and shall send notice of the distribution,
subdivision or combination at least 20 days prior to such Record Date to
each Record Holder as of the date not less than 10 days prior to the date
of such notice. The General Partner also may cause a firm of independent
public accountants selected by it to calculate the number of Units to be
held by each Record Holder after giving effect to such distribution,
subdivision or combination. The General Partner shall be entitled to rely
on any certificate provided by such firm as conclusive evidence of the
accuracy of such calculation.
34
(c) Promptly following any such distribution, subdivision or
combination, the General Partner may cause Certificates to be issued to the
Record Holders of Units as of the applicable Record Date representing the
new number of Units held by such Record Holders, or the General Partner may
adopt such other procedures as it may deem appropriate to reflect such
distribution, subdivision or combination; provided, however, if any such
distribution, subdivision or combination results in a smaller total number
of Units Outstanding, the General Partner shall require, as a condition to
the delivery to a Record Holder of such new Certificate, the surrender of
any Certificate held by such Record Holder immediately prior to such Record
Date.
(d) Except with respect to Senior Units, the Partnership shall not
issue fractional Units upon any distribution, subdivision or combination of
Units. If a distribution, subdivision or combination of Common Units would
result in the issuance of fractional Common Units but for the provisions of
Section 4.9 and this Section 4.10(d), each fractional Common Unit shall be
rounded to the nearest whole Common Unit (and a 0.5 Common Unit shall be
rounded to the next higher Common Unit).
ARTICLE V
ALLOCATIONS AND DISTRIBUTIONS
---------------------------------
Section 5.1 Allocations for Capital Account Purposes. For purposes of
maintaining the Capital Accounts and in determining the rights of the Partners
among themselves, the Partnership's items of income, gain, loss and deduction
(computed in accordance with Section 4.5(b)) shall be allocated among the
Partners in each taxable year (or portion thereof) as provided hereinbelow.
(a) Net Income. After giving effect to the special allocations set
forth in Section 5.1(d), Net Income for each taxable period and all items
of income, gain, loss and deduction taken into account in computing Net
Income for such taxable period shall be allocated as follows:
(i) First, to the General Partner in an amount equal to the Percentage
Interest of its General Partner Interest and to the Limited Partners
holding Senior Units, Pro Rata, in an amount equal to 100% less the
Percentage Interest of the General Partner Interest, until the aggregate
Net Income allocated to such Partners pursuant to this Section 5.1(a)(i)
for the current and all previous taxable years is equal to the aggregate
Net Losses allocated to such Partners pursuant to Section 5.1(b)(iii) for
all previous taxable years;
(ii) Second, 100% to the General Partner until the aggregate Net
Income allocated to the General Partner pursuant to this Section 5.1(a)(ii)
for the current taxable year and all previous taxable years is equal to the
aggregate Net Losses allocated to the General Partner pursuant to Section
5.1(b)(iv) for all previous taxable years;
(iii) Third, to the Unitholders, Pro Rata, until the aggregate Net
Income allocated to such Partners pursuant to this Section 5.1(a)(iii) for
the current taxable year and all previous taxable years is equal to the
aggregate Net Losses allocated to such Partners pursuant to Section
5.1(b)(ii) for all previous taxable years; and
(iv) Fourth, the balance, if any, to the Unitholders, Pro Rata.
35
(b) Net Losses. After giving effect to the special allocations set
forth in Section 5.1(d), Net Losses for each taxable period and all items
of income, gain, loss and deduction taken into account in computing Net
Losses for such taxable period shall be allocated as follows:
(i) First, to the Unitholders, Pro Rata, until the aggregate Net
Losses allocated to such Partners pursuant to this Section 5.1(b)(i) for
the current taxable year and all previous taxable years is equal to the
aggregate Net Income allocated to such Partners pursuant to Section
5.1(a)(iv) for all previous taxable years;
(ii) Second, to the Unitholders, Pro Rata; provided, that Net Losses
shall not be allocated to such Partners pursuant to this Section 5.1(b)(ii)
to the extent that such allocation would cause any Limited Partner holding
Common Units to have a deficit balance in its Adjusted Capital Account at
the end of such taxable year (or increase any existing deficit balance in
its Adjusted Capital Account);
(iii) Third, to the General Partner in an amount equal to the
Percentage Interest of its General Partner Interest and to the Limited
Partners holding Senior Units, Pro Rata, in an amount equal to 100% less
the Percentage Interest of the General Partner Interest; provided, that Net
Losses shall not be allocated to such Partners pursuant to this Section
5.1(b)(iii) to the extent such allocation would cause any Limited Partner
holding Senior Units to have a deficit balance in its Adjusted Capital
Account at the end of such taxable year (or increase any existing deficit
balance in its Adjusted Capital Account); and
(iv) Fourth, the balance, if any, 100% to the General Partner.
(c) Net Termination Gains and Losses. After giving effect to the
special allocations set forth in Section 5.1(d), all items of income gain,
loss and deduction taken into account in computing Net Termination Gain or
Net Termination Loss for such taxable period shall be allocated in the same
manner as such Net Termination Gain or Net Termination Loss is allocated
hereunder. All allocations under this Section 5.1(c) shall be made after
Capital Account balances have been adjusted by all other allocations
provided under this Section 5.1 and after all distributions of Available
Cash provided under Section 5.4 have been made with respect to the taxable
period ending on the date of the Partnership's liquidation pursuant to
Section 14.3.
(i) If a Net Termination Gain is recognized (or deemed recognized
pursuant to Section 4.5(d)) from Termination Capital Transactions, such Net
Termination Gain shall be allocated among the Partners in the following
manner (and the Adjusted Capital Accounts of the Partners shall be
increased by the amount so allocated in each of the following subclauses,
in the order listed, before an allocation is made pursuant to the next
succeeding subclause):
(A) First, to each Partner having a deficit balance in its
Adjusted Capital Account, in the proportion that such deficit balance
bears to the total deficit balances in the Adjusted Capital Accounts
of all Partners, until each such Partner has been allocated Net
Termination Gain equal to any such deficit balance in its Adjusted
Capital Account;
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(B) Second, to the Limited Partners holding Senior Units, Pro
Rata, in an amount equal to 100% less the Percentage Interest of the
General Partner Interest, and to the General Partner in an amount
equal to the Percentage Interest of its General Partner Interest,
until the Adjusted Capital Account in respect of each Senior Unit then
Outstanding is equal to the sum of (i) the Senior Unit Liquidation
Preference (or fraction thereof) plus (ii) any accumulated and unpaid
Senior Unit Distributions.
(C) Third, to the Unitholders, Pro Rata, until the Adjusted
Capital Account in respect of each Common Unit then Outstanding
(without taking into account any Arrearage that makes up a part of the
applicable Adjusted Capital Account) is equal to the sum of (1) its
Unrecovered Initial Unit Price plus (2) the Minimum Quarterly
Distribution for the Quarter during which such Net Termination Gain is
recognized, reduced by any distribution made pursuant to Section 5.4
or Arrearage accrued with respect to a Common Unit in an amount equal
to the Minimum Quarterly Distribution paid during such Quarter (the
amount determined pursuant to this clause (2) is hereinafter defined
as the "Unpaid MQD");
(D) Fourth, to the Unitholders, Pro Rata, until the Adjusted
Capital Account in respect of each Common Unit then Outstanding
(without taking into account any Arrearage that makes up a part of the
applicable Adjusted Capital Account) is equal to the sum of (1) its
Unrecovered Initial Unit Price, plus (2) the Unpaid MQD, if any, for
such Common Unit with respect to the Quarter during which such Net
Termination Gain is recognized, plus (3) the excess of (aa) the First
Target Distribution less the Minimum Quarterly Distribution for each
Quarter of the Partnership's existence over (bb) the amount of any
distributions of Cash from Operations that was distributed or
Arrearage that was accrued pursuant to:
(v) Section 5.4(a)(iii) hereof,
(w) Section 5.4(d)(iii) hereof,
(x) solely with respect to the distribution referenced in
Section 5.4(a)(iii) pursuant to Sections 5.4(a)(vii), 5.4(b)(ii),
5.4(b)(iii), 5.4(c)(ii) and 5.4(c)(iii) hereof,
(y) Section 5.4(c) of the Amended and Restated Agreement and
the Second Amended and Restated Agreement, and
(z) Sections 5.4(a)(iv) or 5.4(b)(ii) of the Original
Agreement,
(the sum of (1) plus (2) plus (3) is hereinafter defined as the "First
Liquidation Target Amount");
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(E) Fifth, to the Limited Partners holding Common Units (including holders
of the FCI Common Units), Pro Rata, in an amount equal to 86.8673% less the
Percentage Interest of the General Partner Interest, to the General Partner in
an amount equal to the Percentage Interest of its General Partner Interest, and
13.1327% to the Special Limited Partners, Pro Rata, until the Adjusted Capital
Account in respect of each Common Unit then Outstanding (without taking into
account any Arrearage that makes up a part of the applicable Adjusted Capital
Account) is equal to the sum of (1) the First Liquidation Target Amount, plus
(2) the excess of (aa) the Second Target Distribution less the First Target
Distribution for each Quarter of the Partnership's existence over (bb) the
amount of any distributions of Cash from Operations that was distributed or
Arrearage that was accrued pursuant to:
(v) Section 5.4(a)(iv) hereof,
(w) Section 5.4(d)(iv) hereof,
(x) solely with respect to the distribution referenced in Section
5.4(a)(iv) pursuant to Sections 5.4(a)(vii), 5.4(b)(ii), 5.4(b)(iii),
5.4(c)(ii) and 5.4(c)(iii) hereof,
(y) Section 5.4(d) of the Amended and Restated Agreement and the
Second Amended and Restated Agreement, and
(z) Sections 5.4(a)(v) or 5.4(b)(iii) of the Original Agreement,
(the sum of (1) plus (2) is hereinafter defined as the "Second Liquidation
Target Amount");
(F) Sixth, to the Limited Partners holding Common Units (including holders
of the FCI Common Units), Pro Rata, in an amount equal to 76.7653% less the
Percentage Interest of the General Partner Interest, to the General Partner in
an amount equal to the Percentage Interest of its General Partner Interest, and
23.2347% to the Special Limited Partners, Pro Rata, until the Adjusted Capital
Account in respect of each Common Unit then Outstanding (without taking into
account any Arrearage that makes up a part of the applicable Adjusted Capital
Account) is equal to the sum of (1) the Second Liquidation Target Amount, plus
(2) the excess of (aa) the Third Target Distribution less the Second Target
Distribution for each Quarter of the Partnership's existence over (bb) the
amount of any distributions of Cash from Operations that was distributed or
Arrearage that was accrued pursuant to:
(v) Section 5.4(a)(v) hereof,
(w) Section 5.4(d)(v) hereof,
38
(x) solely with respect to the distribution referenced in Section
5.4(a)(v) pursuant to Sections 5.4(a)(vii), 5.4(b)(ii), 5.4(b)(iii),
5.4(c)(ii) and 5.4(c)(iii) hereof,
(y) Section 5.4(e) of the Amended and Restated Agreement and the
Second Amended and Restated Agreement, and
(z) Sections 5.4(a)(vi) or 5.4(b)(iv) of the Original Agreement;
and
(G) Thereafter, any remaining amount to the Limited Partners holding Common
Units (including holders of the FCI Common Units), Pro Rata, in an amount equal
to 51.5102% less the Percentage Interest of the General Partner Interest, to the
General Partner in an amount equal to the Percentage Interest of its General
Partner Interest, and 48.4898% to the Special Limited Partners, Pro Rata.
(ii) If a Net Termination Loss is recognized (or deemed recognized pursuant to
Section 4.5(d)) from Termination Capital Transactions, such Net Termination Loss
shall be allocated to the Partners in the following manner:
(A) First, to the Unitholders, Pro Rata, until the Adjusted Capital Account
in respect of each Common Unit then Outstanding (without taking into account any
Arrearage that makes up a part of the applicable Adjusted Capital Account) has
been reduced to zero;
(B) Second, to the holders of the FCI Common Units until the Adjusted
Capital Account in respect of each FCI Common Unit then Outstanding has been
reduced to zero;
(C) Third, to the Limited Partners holding Senior Units, Pro Rata, in an
amount equal to 100% less the Percentage Interest of the General Partner
Interest, and to the General Partner in an amount equal to the Percentage
Interest of its General Partner Interest, until the Adjusted Capital Account in
respect of each Senior Unit then Outstanding has been reduced to zero; and
(D) Thereafter, the balance, if any, 100% to the General Partner.
(d) Special Allocations. Notwithstanding any other provision of this
Section 5.1, the following special allocations shall be made for such taxable
period:
(i) Partnership Minimum Gain Chargeback. Notwithstanding any other
provision of this Section 5.1, 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 5.1(d), 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 5.1(d) with respect to such taxable period
(other than an allocation pursuant to Sections 5.1(d)(vi) and 5.1(d)(vii)). This
Section 5.1(d)(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.
39
(ii) Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding
the other provisions of this Section 5.1 (other than Section 5.1(d)(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
5.1(d), 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 5.1(d), other
than Section 5.1(d)(i) and other than an allocation pursuant to Sections
5.1(d)(vi) and 5.1(d)(vii), with respect to such taxable period. This Section
5.1(d)(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) Priority Allocations. First, if the amount of cash or the Net Agreed
Value of any property distributed (except cash or property distributed pursuant
to Section 14.3 or 14.4) to any Limited Partner holding Common Units with
respect to a taxable year is greater (on a per Unit basis) than the amount of
cash or the Net Agreed Value of property distributed to the other Limited
Partners holding Common Units (on a per Unit basis), then (1) each Limited
Partner holding Common Units receiving such greater cash or property
distribution shall be allocated gross income in an amount equal to the product
of (aa) the amount by which the distribution (on a per Unit basis) to such
Limited Partners holding Common Units exceeds the distribution (on a per Unit
basis) to the Limited Partner holding Common Units receiving the smallest
distribution and (bb) the number of Units owned by the Limited Partners holding
Common Units receiving the greater distribution; and (2) the General Partner
shall be allocated gross income in an aggregate amount equal to the sum of the
amounts allocated in clause (1) above multiplied by the Percentage Interest of
its General Partner Interest, divided by 100% less the Percentage Interest of
the General Partner Interest. Second, gross income for the taxable period shall
be allocated 100% to the Limited Partners holding Senior Units, Pro Rata, until
the aggregate amount of such items allocated to the Limited Partners holding
Senior Units, Pro Rata, under this paragraph (iii) for the current taxable
period and all previous taxable periods is equal to the cumulative amount of
cash distributed to the Limited Partners holding Senior Units, Pro Rata,
pursuant to Sections 5.4 and 5.5(a) for the current and all previous taxable
periods. All or a portion of the remaining items of Partnership gross income or
gain for the taxable period, if any, shall be allocated 100% to the Special
Limited Partners, Pro Rata, until the aggregate amount of such items allocated
to the Special Limited Partners, Pro Rata, under this paragraph (iii) for the
current taxable period and all previous taxable periods is equal to the
cumulative amount of cash distributed to the Special Limited Partners, Pro Rata,
from the Initial Closing Date through the end of such taxable period.
40
(iv) 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
specifically 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
5.1(d)(i) or (ii).
(v) 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 allocation pursuant to this Section 5.1(d)(v) 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 for in this Section 5.1
have been tentatively made as if this Section 5.1(d)(v) were not in this
Agreement.
(vi) Nonrecourse Deductions. Nonrecourse Deductions for any taxable period
shall be allocated to the Partners in accordance with their respective
Percentage Interests. If the General Partner 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 General Partner is
authorized, upon notice to the Limited Partners, to revise the prescribed ratio
to the numerically closest ratio that does satisfy such requirements.
(vii) 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.
(viii) 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.
41
(ix) 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(b)
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.
(x) Economic Uniformity.
(A) Immediately prior to a sale, exchange or other disposition of all or
any portion of the Senior Units, the holders disposing of Senior Units may elect
that the Partnership allocate items of Partnership gross income or gain 100% to
the Limited Partners disposing of Senior Units until the Limited Partners
disposing of Senior Units have been allocated an amount of gross income or gain
which causes the Capital Accounts maintained with respect to each of the Senior
Units to be equal. Immediately prior to the conversion of all or any portion of
the Senior Units into Common Units, the Limited Partners converting such Senior
Units may elect that the Partnership allocate items of Partnership gross income
or gain until the Limited Partners converting such Senior Units have been
allocated an amount of gross income or gain which causes the Capital Account
maintained with respect to each of the Senior Units to be converted to be equal
to the product of (x) the number of Common Units into which the Senior Units
will be converted and (y) the Per Unit Capital Account for a Common Unit.
(B) If at the time of the sale, exchange or other disposition of Senior
Units, the Senior Units are publicly traded or will become publicly traded as a
result of the sale, exchange or disposition, the General Partner may cause the
Partnership to allocate items of gross income or gain 100% to the Limited
Partners disposing of Senior Units until the Limited Partners disposing of
Senior Units have been allocated an amount of gross income or gain which causes
the Capital Accounts maintained with respect to each of the Senior Units that
will be publicly traded after the disposition to be equal. Immediately prior to
the sale, exchange or other disposition in the public marketplace of Common
Units into which Senior Units have been converted, the General Partner may cause
the Partnership to allocate items of gross income or gain 100% to the Limited
Partners disposing of such Common Units until the Limited Partners disposing of
such Common Units have been allocated an amount of gross income or gain which
causes the Capital Account maintained with respect to all Common Units that are
publicly traded after the disposition to be equal.
42
(xi) Curative Allocation.
(A) Notwithstanding any other provision of this Section 5.1, 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 5.1.
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 5.1(d)(xi)(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 5.1(d)(xi)(A)
shall be deferred with respect to allocations pursuant to clauses (1) and (2)
hereof to the extent the General Partner reasonably determines that such
allocations are likely to be offset by subsequent Required Allocations.
(B) The General Partner shall have reasonable discretion, with respect to
each taxable period, to (1) apply the provisions of Section 5.1(d)(xi)(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 5.1(d)(xi)(A) among the Partners in a manner that is likely
to minimize such economic distortions.
(xii) Retirement of Assumed Indebtedness. All losses or deductions
attributable to premiums, consent fees, or other expenditures incurred by the
Partnership to retire indebtedness assumed from the General Partner pursuant to
the Contribution Agreement shall be allocated to the General Partner.
Section 5.2 Allocations for Tax Purposes.
(a) 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 5.1.
(b) 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:
43
(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) except as otherwise provided in Section 5.2(b)(iii), 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 5.1.
(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 4.5(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 5.2(b)(i)(A); and (B) except as otherwise
provided in Section 5.2(b)(iii), 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 5.1.
(iii) The General Partner shall apply the principles of Treasury Regulation
Section 1.704-3(d) to eliminate Book-Tax Disparities.
(c) For the proper administration of the Partnership and for the
preservation of uniformity of the Units (or any class or classes thereof), the
General Partner 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 (or any class or classes thereof). The General Partner may adopt such
conventions, make such allocations and make such amendments to this Agreement as
provided in this Section 5.2(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) The General Partner in its sole 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 the inconsistency of such
approach with Treasury Regulation Section 1.167(c)-1(a)(6) and Proposed Treasury
Regulation 1.197-2(g)(3) or any successor regulations thereto. If the General
Partner determines that such reporting position cannot reasonably be taken, the
General Partner may adopt depreciation and amortization conventions under which
all purchasers acquiring Units 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 General
Partner chooses not to utilize such aggregate method, the General Partner 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 the Limited Partners or the Record Holders of
any class or classes of Units.
44
(e) 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 5.2, 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) 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) Each item of Partnership income, gain, loss and deduction attributable
to transferred Units shall, for federal income tax purposes, be determined on an
annual basis and prorated on a monthly basis and shall be allocated to the
Partners as of the opening of the New York Stock Exchange on the first Business
Day of each month; provided, however, that gain or loss on a sale or other
disposition of any assets of the Partnership other than in the ordinary course
of business shall be allocated to the Partners as of the opening of the New York
Stock Exchange on the first Business Day of the month in which such gain or loss
is recognized for federal income tax purposes. The General Partner may revise,
alter or otherwise modify such methods of allocation as it determines necessary,
to the extent permitted or required by Section 706 of the Code and the
regulations or rulings promulgated thereunder.
(h) Allocations that would otherwise be made to a Limited Partner under the
provisions of this Article V shall instead be made to the beneficial owner of
Units held by a nominee in any case in which the nominee has furnished the
identity of such owner to the Partnership in accordance with Section 6031(c) of
the Code or any other method acceptable to the General Partner in its sole
discretion.
Section 5.3 Requirement and Characterization of Distributions.
(a) Within 45 days following the end of (i) the period beginning on the
Initial Closing Date and ending on October 31, 1994 and (ii) each Quarter
commencing with the Quarter beginning on November 1, 1994, an amount equal to
100% of Available Cash with respect to such Quarter shall be distributed in
accordance with this Article V by the Partnership to the Partners, as of the
Record Date selected by the General Partner in its reasonable discretion. All
amounts of Available Cash distributed by the Partnership on any date from any
source shall be deemed to be Cash from Operations until the sum of all amounts
of Available Cash theretofore distributed by the Partnership to the Partners
pursuant to Section 5.4 equals the aggregate amount of all Cash from Operations
generated by the Partnership since the Initial Closing Date through the close of
the immediately preceding Quarter. Any remaining amounts of Available Cash
distributed by the Partnership on such date shall, except as otherwise provided
in Section 5.5, be deemed to be Cash from Interim Capital Transactions.
45
(b) Notwithstanding the definitions of Available Cash and Cash from
Operations contained herein, disbursements (including, without limitation,
contributions to the Operating Partnership or disbursements on behalf of the
Operating Partnership) made or cash reserves established, increased or reduced
after the end of any Quarter but on or before the date on which the Partnership
makes its distribution of Available Cash in respect of such Quarter as required
by Section 5.3(a) shall be deemed to have been made, established, increased or
reduced for purposes of determining Available Cash and Cash from Operations,
within such Quarter if the General Partner so determines. Notwithstanding the
foregoing, in the event of the dissolution and liquidation of the Partnership,
all proceeds of such liquidation shall be applied and distributed in accordance
with, and subject to the terms and conditions of, Sections 14.3 and 14.4.
Section 5.4 Distributions of Cash from Operations and Additional Senior
Units. Subject to Section 17-607 of the Delaware Act, Available Cash with
respect to any Quarter that is deemed to be Cash from Operations pursuant to the
provisions of Section 5.3 or 5.5 shall be distributed as follows, except as
otherwise required by Section 4.3(b) in respect of additional Partnership
Securities issued pursuant thereto and except that clauses (a), (b) and (c) of
this Section 5.4 shall not be effective until the end of the Information
Statement Period:
(a) if during the Arrearage Period and if the Cumulative FCI Common
Unit Arrearage is equal to zero immediately prior to making such
distribution:
(i) First, to the Limited Partners holding Senior Units, Pro Rata, in
an amount equal to 100% less the Percentage Interest of the General Partner
Interest, and to the General Partner in an amount equal to the Percentage
Interest of its General Partner Interest, until there has been distributed
in respect of each Senior Unit then Outstanding an amount equal to the
Senior Unit Distribution and any accumulated and unpaid Senior Unit
Distributions through the last day of the preceding Quarter;
(ii) Second, to the Limited Partners holding Common Units (other than
the holders of the FCI Common Units), Pro Rata, in an amount equal to 100%
less the Percentage Interest of the General Partner Interest, and to the
General Partner in an amount equal to the Percentage Interest of its
General Partner Interest, until there has been distributed in respect of
each Common Unit (other than any FCI Common Unit) then Outstanding an
amount equal to the Minimum Quarterly Distribution;
(iii) Third, to the Limited Partners holding Common Units (other than
the holders of the FCI Common Units), Pro Rata, in an amount equal to 100%
less the Percentage Interest of the General Partner Interest, and to the
General Partner in an amount equal to the Percentage Interest of its
General Partner Interest, until there has been distributed in respect of
each Common Unit (other than any FCI Common Unit) then Outstanding an
amount equal to the excess of the Ceiling Quarterly Distribution or the
First Target Distribution (whichever is less) over the Minimum Quarterly
Distribution; provided, that if the Ceiling Quarterly Distribution is used
in this calculation, clauses (iv), (v) and (vi) of this Section 5.4(a)
shall not be operative and the distribution shall proceed to Section
5.4(a)(vii);
46
(iv) Fourth, to the Limited Partners holding Common Units (other than
the holders of the FCI Common Units), Pro Rata, in an amount equal to
86.8673%% less the Percentage Interest of the General Partner Interest, to
the General Partner in an amount equal to the Percentage Interest of its
General Partner Interest, and 13.1327% to the Special Limited Partners, Pro
Rata, until there has been distributed in respect of each Common Unit
(other than any FCI Common Unit) then Outstanding an amount equal to the
excess of the Ceiling Quarterly Distribution or the Second Target
Distribution (whichever is less) over the First Target Distribution;
provided, that if the Ceiling Quarterly Distribution is used in this
calculation, clauses (v) and (vi) of this Section 5.4(a) shall not be
operative and the distribution shall proceed to Section 5.4(a)(vii);
(v) Fifth, to the Limited Partners holding Common Units (other than
the holders of the FCI Common Units), Pro Rata, in an amount equal to
76.7653%% less the Percentage Interest of the General Partner Interest, to
the General Partner in an amount equal to the Percentage Interest of its
General Partner Interest, and 23.2347% to the Special Limited Partners, Pro
Rata, until there has been distributed in respect of each Common Unit
(other than any FCI Common Unit) then Outstanding an amount equal to the
excess of the Ceiling Quarterly Distribution or the Third Target
Distribution (whichever is less) over the Second Target Distribution;
provided, that if the Ceiling Quarterly Distribution is used in this
calculation, clause (vi) of this Section 5.4(a) shall not be operative and
the distribution shall proceed to Section 5.4(a)(vii);
(vi) Sixth, to the Limited Partners holding Common Units (other than
the holders of the FCI Common Units), Pro Rata, in an amount equal to
51.5102%% less the Percentage Interest of the General Partner Interest, to
the General Partner in an amount equal to the Percentage Interest of its
General Partner Interest, and 48.4898% to the Special Limited Partners, Pro
Rata, until there has been distributed in respect of each Common Unit
(other than any FCI Common Unit) then Outstanding an amount equal to the
excess of the Ceiling Quarterly Distribution over the Third Target
Distribution; and
(vii) Thereafter, to the holders of the FCI Common Units, the holder
of the General Partner Units and the Special Limited Partners in the same
order and until the aggregate distributions on a per FCI Common Unit basis
are the same amounts as the distributions made on a per Common Unit basis
pursuant to Section 5.4(a)(ii) through 5.4(a)(vi) but with any distribution
made to the Common Units made to the FCI Common Units;
provided, however, that for this clause (a) at the point (the "Section 5.4(a)
Threshold Point") in the application of clauses (ii) through (vii) above that
the Cumulative FCI Common Unit Arrearage equals $36 million, the distribution
shall continue pursuant to Section 5.4(c)(ii) (and beginning with the specific
clause of Section 5.4(a)(ii) through (vi) applicable to the Section 5.4(a)
Threshold Point) and Section 5.4(c)(iii) with respect to all Unitholders and the
Special Limited Partners, as applicable, so that the FCI Common Units thereafter
receive the distribution they otherwise would have received under that Section
5.4(c)(ii) (and the applicable clauses of Section 5.4(a)(ii) through (vi)) with
any remainder distributed pursuant to Section 5.4(c)(iii);
47
(b) if during the Arrearage Period and if the Cumulative FCI Common
Unit Arrearage immediately prior to making such distribution is greater
than zero but less than $36 million:
(i) First, to the Limited Partners holding Senior Units, Pro Rata, in
an amount equal to 100% less the Percentage Interest of the General Partner
Interest, and to the General Partner in an amount equal to the Percentage
Interest of its General Partner Interest, until there has been distributed
in respect of each Senior Unit then Outstanding an amount equal to the
Senior Unit Distribution and any accumulated and unpaid Senior Unit
Distributions through the last day of the preceding Quarter;
(ii) Second, to the Unitholders (other than the holders of the FCI
Common Units) and the Special Limited Partners, until there has been
distributed in respect of each Common Unit (other than any FCI Common Unit)
then Outstanding an amount equal to the Ceiling Quarterly Distribution in
the order specified in Section 5.4(a)(ii) through 5.4(a)(vi);
(iii) Third, to the Unitholders and the Special Limited Partners, in
the same order and until the aggregate distributions on a per FCI Common
Unit basis are the same amounts as the distributions made on a per Common
Unit basis pursuant to Section 5.4(b)(ii) but with any distribution made to
the Common Units made to the FCI Common Units; and
(iv) Thereafter, to the holders of the FCI Common Units, the General
Partner and the Special Limited Partners, until there has been distributed
an amount equal to each Arrearage beginning with the Arrearage applicable
to the oldest Quarter applied in the same manner and to the same holders of
Units and Special Limited Partners as each such Arrearage was accrued
pursuant to Sections 5.4(a) or 5.4(b);
provided, however, that for this clause (b) at the point (the "Section
5.4(b) Threshold Point") in the application of clauses (ii) and (iii) above that
the Cumulative FCI Common Unit Arrearage equals $36 million, the distribution
shall continue pursuant to Section 5.4(c)(ii) (and beginning with the specific
clause of Section 5.4(a)(ii) through (vi) applicable to the Section 5.4(b)
Threshold Point) and Section 5.4(c)(iii) with respect to all Unitholders and the
Special Limited Partners, as applicable, so that the FCI Common Units thereafter
receive the distribution they otherwise would have received under that Section
5.4(c)(ii) (and the applicable clauses of Section 5.4(a)(ii) through (vi)) with
any remainder distributed pursuant to Section 5.4(c)(iii);
(c) if during the Arrearage Period and the Cumulative FCI Common Unit
Arrearage equals $36 million or if after the Arrearage Period and if the
Cumulative FCI Common Unit Arrearage is greater than zero:
48
(i) First, to the Limited Partners holding Senior Units, Pro Rata, in an
amount equal to 100% less the Percentage Interest of the General Partner
Interest, and to the General Partner in an amount equal to the Percentage
Interest of its General Partner Interest, until there has been distributed in
respect of each Senior Unit then Outstanding an amount equal to the Senior Unit
Distribution and any accumulated and unpaid Senior Unit Distributions through
the last day of the preceding Quarter;
(ii) Second, to the Unitholders (including the holders of the FCI Common
Units) and the Special Limited Partners, until there has been distributed in
respect of each Common Unit (including any FCI Common Unit) then Outstanding an
amount equal to the Ceiling Quarterly Distribution as if such distribution was
made pursuant to Section 5.4(a)(ii) through 5.4(a)(vi) without the use of the
phrases "(other than the holders of the FCI Common Units)" and "(other than any
FCI Common Unit)"; and
(iii) Thereafter, to the holders of the FCI Common Units, the General
Partner and the Special Limited Partners, until there has been distributed an
amount equal to each Arrearage beginning with the Arrearage applicable to the
oldest Quarter applied in the same manner and to the same holders of Units and
Special Limited Partners as each such Arrearage was accrued pursuant to Sections
5.4(a) or 5.4(b);
or
(d) if after the Arrearage Period and if the Cumulative FCI Common Unit
Arrearage is zero:
(i) First, to the Limited Partners holding Senior Units, Pro Rata, in an
amount equal to 100% less the Percentage Interest of the General Partner
Interest, and to the General Partner in an amount equal to the Percentage
Interest of its General Partner Interest, until there has been distributed in
respect of each Senior Unit then Outstanding an amount equal to the Senior Unit
Distribution and any accumulated and unpaid Senior Unit Distributions through
the last day of the preceding Quarter;
(ii) Second, to the Unitholders, Pro Rata, until there has been distributed
in respect of each Common Unit then Outstanding an amount equal to the Minimum
Quarterly Distribution;
(iii) Third, to the Unitholders, Pro Rata, until there has been distributed
in respect of each Common Unit then Outstanding an amount equal to the excess of
the First Target Distribution over the Minimum Quarterly Distribution;
(iv) Fourth, to the Limited Partners holding Common Units (including
holders of the FCI Common Units), Pro Rata, in an amount equal to 86.8673% less
the Percentage Interest of the General Partner Interest, to the General Partner
in an amount equal to the Percentage Interest of its General Partner Interest,
and 13.1327% to the Special Limited Partners, Pro Rata, until there has been
distributed in respect of each Common Unit then Outstanding an amount equal to
the excess of the Second Target Distribution over the First Target Distribution;
49
(v) Fifth, to the Limited Partners holding Common Units (including holders
of the FCI Common Units), Pro Rata, in an amount equal to 76.7653% less the
Percentage Interest of the General Partner Interest, to the General Partner in
an amount equal to the Percentage Interest of its General Partner Interest, and
23.2347% to the Special Limited Partners, Pro Rata, until there has been
distributed in respect of each Common Unit then Outstanding an amount equal to
the excess of the Third Target Distribution over the Second Target Distribution;
and
(vi) Thereafter, to the Limited Partners holding Common Units (including
holders of the FCI Common Units), Pro Rata, in an amount equal to 51.5102% less
the Percentage Interest of the General Partner Interest, to the General Partner
in an amount equal to the Percentage Interest of its General Partner Interest,
and 48.4898% to the Special Limited Partners, Pro Rata;
provided, however, that for Sections 5.4(a), (b), (c) and (d):
(1) notwithstanding the amount of Available Cash that is deemed to be Cash
from Operations with respect to such Quarter, Senior Unit Distributions accruing
prior to February 1, 2001, shall be paid by the issuance of additional Senior
Units having an aggregate Senior Unit Liquidation Preference equal to the amount
of such Senior Unit Distributions ("Additional Senior Units"), which may include
fractional Senior Units or the cash equivalent thereof based on the Senior Unit
Liquidation Preference;
(2) if (A) the Senior Unit Distribution has been reduced to zero pursuant
to the second sentence of Section 5.6(a), (B) all of the Senior Units have been
converted pursuant to Section 5.7(b) or (C) all of the Senior Units have been
redeemed pursuant to Section 17.2, then clause (i) of each of subsections (a),
(b), (c) and (d) of this Section 5.4 shall terminate and have no further force
or effect; and,
(3) if the Minimum Quarterly Distribution, the First Target Distribution,
the Second Target Distribution and the Third Target Distribution have been
reduced to zero pursuant to the second sentence of Section 5.6(b), then
subsections (a)(ii) through (a)(v), b(ii) and b(iii) as they relate to (a)(ii)
through a(v), c(ii) as it relates to (a)(ii) through (a)(v) and d(ii) through
(d)(v) of this Section 5.4 shall terminate and have no further force or effect.
Section 5.5 Distributions of Cash from Interim Capital Transactions.
Subject to Section 17-607 of the Delaware Act, Available Cash that constitutes
Cash from Interim Capital Transactions shall be distributed, unless the
provisions of Section 5.3 require otherwise, as follows:
(a) First, to the Limited Partners holding Senior Units, Pro Rata, in an
amount equal to 100% less the Percentage Interest of the General Partner
Interest, and to the General Partner in an amount equal to the Percentage
Interest of its General Partner Interest, until there has been distributed in
respect of each Senior Unit then Outstanding an amount equal to any accumulated
and unpaid Senior Unit Distribution through such date;
50
(b) Second, to the Limited Partners holding Senior Units, Pro Rata, in an
amount equal to 100% less the Percentage Interest of the General Partner
Interest, and to the General Partner in an amount equal to the Percentage
Interest of its General Partner Interest, until a hypothetical holder of a
Senior Unit acquired on the WNGL Closing Date has received with respect to such
Senior Unit, during the period since the WNGL Closing Date through such date,
distributions of Available Cash that are deemed to be Cash from Interim Capital
Transactions in an aggregate amount equal to the Senior Unit Liquidation
Preference;
(c) Third, to the Unitholders, Pro Rata, until a hypothetical holder of a
Common Unit acquired on the Initial Closing Date has received with respect to
such Common Unit, during the period since the Initial Closing Date through such
date, distributions of Available Cash that are deemed to be Cash from Interim
Capital Transactions in an aggregate amount equal to the Initial Unit Price; and
(d) Thereafter, all Available Cash shall be distributed as if it were Cash
from Operations and shall be distributed in accordance with Section 5.4.
Section 5.6 Adjustment of Senior Unit Liquidation Preference, Senior Unit
Distribution, Minimum Quarterly Distribution and Target Distribution Levels.
(a) The Senior Unit Liquidation Preference and the Senior Unit Distribution
shall be proportionately adjusted in the event of any distribution, combination
or subdivision (whether effected by a distribution payable in Senior Units or
otherwise) of Senior Units in accordance with Section 4.10. In the event of a
distribution of Available Cash to the Limited Partners holding Senior Units
pursuant to Section 5.5(b), the Senior Unit Liquidation Preference shall be
reduced by the amount of that distribution to the Limited Partners holding
Senior Units, Pro Rata. In the event of a distribution of Available Cash to the
Limited Partners holding Senior Units pursuant to Section 5.5(b), the Senior
Unit Distribution shall be adjusted proportionately downward to equal the
product obtained by multiplying the otherwise applicable Senior Unit
Distribution by a fraction of which the numerator is the Senior Unit Liquidation
Preference immediately after giving effect to such distribution and of which the
denominator is the Senior Unit Liquidation Preference immediately prior to
giving effect to such distribution.
(b) The Minimum Quarterly Distribution, First Target Distribution, Second
Target Distribution and Third Target Distribution shall be proportionately
adjusted in the event of any distribution, combination or subdivision (whether
effected by a distribution payable in Units or otherwise) of Units or other
Partnership Securities in accordance with Section 4.10. If a distribution of
Available Cash is made that is deemed to be Cash from Interim Capital
Transactions, the Minimum Quarterly Distribution, First Target Distribution,
Second Target Distribution and Third Target Distribution shall be adjusted
proportionately downward to equal the product obtained by multiplying the
otherwise applicable Minimum Quarterly Distribution, First Target Distribution,
Second Target Distribution and Third Target Distribution, as the case may be, by
a fraction of which the numerator is the Unrecovered Initial Unit Price of the
Common Units immediately after giving effect to such distribution and of which
the denominator is the Unrecovered Initial Unit Price of the Common Units
immediately prior to giving effect to such distribution.
51
(c) The Minimum Quarterly Distribution, First Target Distribution, Second
Target Distribution and Third Target Distribution shall also be subject to
adjustment pursuant to Section 9.6.
Section 5.7 Special Provisions Relating to the Senior Units.
(a) Immediately upon the conversion of Senior Units into Common Units as
provided in Section 5.7(b), the holder of a Senior Unit so converted shall
possess all of the rights and obligations of a Limited Partner holding Common
Units hereunder, including, without limitation, the right to vote as a Limited
Partner holding Common Units, the right to participate in allocations of income,
gain, loss and deduction and distributions of cash made with respect to Common
Units pursuant to this Article V.
(b) Each holder of Senior Units shall have the right, at its option,
subject to the terms of this Section 5.7, to convert any or all of such holders'
Senior Units into Common Units at any time during the time period commencing
upon the earlier to occur of:
(i) December 31, 2005, upon not less than 90 days prior written notice to
the Partnership (which notice may be given prior to December 31, 2005) in
accordance with Section 5.7(d), or
(ii) a Material Event, upon not less than 10 days prior written notice to
the Partnership in accordance with Section 5.7(d); provided, however, that prior
to the expiration of such 10-day period, the holders of the Senior Units may
revoke their election to convert Senior Units into Common Units at any time
during the pendency of a Material Event by written notice to the Partnership;
and ending on the date upon which the holders of the Senior Units give the
Partnership notice of their election to exercise their registration rights
with respect to the Senior Units pursuant to the WNGL Registration Rights
Agreement.
(c) If the holders of the Senior Units elect to convert any or all of their
Senior Units into Common Units, such number of Senior Units shall be converted
into a number of fully paid and nonassessable (subject to Section 17-607 of the
Delaware Act) Common Units as is equal, subject to Section 5.7(g), to the number
of Senior Units being so converted, multiplied by the sum of (A) the Senior Unit
Liquidation Preference plus (B) any accumulated and unpaid Senior Unit
Distributions to and including the date of conversion, with the product then
divided by the Current Market Price of the Common Units as of the date of
conversion.
(d) The holders of the Senior Units shall exercise the right to convert by
the delivery of written notice, at the Partnership's principal place of
business, during the applicable time period specified in (b) above, that the
holder elects to convert all or a portion of the Senior Units represented by
such Certificates and, subject to Section 5.7(i), specifying the name or names
(with address) in which Certificates representing Common Units are to be issued.
Upon the expiration of the applicable time period specified in (b) above, each
converting holder of Senior Units shall be deemed to be the holder of record of
the number of Common Units issuable upon conversion in accordance with (c)
above, notwithstanding that the Certificates representing such Common Units
shall not then actually be delivered to such Person. Upon notice from the
Partnership, each holder of Senior Units so converted shall promptly surrender
to the Partnership or the Transfer Agent, Certificates representing the Senior
Units so converted, in proper transfer form. On the date of conversion, all
rights with respect to the Senior Units so converted will terminate except for
the right of holders to receive Certificates for the number of Common Units into
which such Senior Units have been converted. If the date for the conversion of
Senior Units into Common Units shall not be a Business Day, then such conversion
shall occur on the next Business Day. Each Senior Unit shall be canceled by the
General Partner upon its conversion.
52
(e) During the period beginning on the first of the twenty (20) Trading
Days immediately prior to the date of conversion through and including the date
of conversion, the Partnership shall not take any action that will affect the
Common Units, including, without limitation, the following:
(i) (A) make a redemption payment or make a distribution payable in Common
Units on any class of Partnership Interest (which, for purposes of this Section
5.7(e) shall include, without limitation, any distributions in the form of
options, warrants or other rights to acquire Partnership Interests) of the
Partnership (other than the issuance of Common Units in connection with the
payment in redemption for, of distributions on or the conversion of Senior
Units); (B) subdivide the outstanding Common Units into a larger number of
Common Units; (C) combine the outstanding Common Units into a smaller number of
Common Units; (D) issue any of its Partnership Securities in a reclassification
of the Common Units; or (E) set a Record Date with respect to any of the events
described in (A) through (D);
(ii) issue to all holders of its Common Units rights, options or warrants
entitling the holders thereof to subscribe for or purchase Common Units (or
securities convertible into or exchangeable for Common Units) other than
issuances of such rights, options or warrants if the holder of Senior Units
would be entitled to receive such rights, options or warrants upon conversion at
any time of Senior Units;
(iii) (A) other than distributions consistent with past practice, make a
Pro Rata distribution to all holders of Common Units consisting exclusively of
cash (excluding any cash distributed upon a merger or consolidation to which
paragraph (g) below applies), or (B) make a distribution to all holders of its
Common Units consisting of evidences of indebtedness, its Partnership Interests
other than Common Units or assets (including securities, but excluding those
rights, options, warrants and distributions referred to in paragraphs (e)(i) or
(e)(ii) above); or
(iv) issue or sell Common Units or securities convertible into or
exchangeable for Common Units, or any options, warrants or other rights to
acquire Common Units.
(f) No fractional Common Units shall be issued upon the conversion of any
Senior Units. If more than one Senior Unit shall be surrendered for conversion
at one time by the same holder, the number of full Common Units issuable upon
conversion thereof shall be computed on the basis of the aggregate Senior Unit
Liquidation Preference of the Senior Units so surrendered. If the conversion of
any Senior Units results in a fraction, an amount equal to such fraction
multiplied by the Current Market Price of the Common Units as of the date of
conversion shall be paid to such holder in cash by the Partnership.
53
(g) In the event of any (i) capital reorganization or reclassification or
other change of outstanding Common Units, (ii) consolidation or merger of the
Partnership with or into another Person in accordance with Section 16.1(b)
(other than a consolidation or merger in which the Partnership is the Surviving
Business Entity and which does not result in any reclassification or change of
outstanding Common Units) or (iii) sale or other disposition to another Person
of all or substantially all of the assets of the Partnership, computed on a
consolidated basis in accordance with Section 16.1(b) (any of the foregoing, a
"Transaction"), lawful provision shall be made such that the Senior Units will
be convertible only into the kind and amount of stock or other securities (of
the Partnership or another issuer) or property or cash receivable upon such
Transaction by a holder of the number of Common Units into which such Senior
Units could have been converted immediately prior to such Transaction. The
provisions of this Section 5.7(g) and any equivalent thereof in any governing
document of the Surviving Business Entity similarly shall apply to successive
Transactions.
(h) The Partnership shall not enter into any agreement that would prohibit
the issuance of the number of Common Units as will from time to time be
sufficient to permit the conversion of all outstanding Senior Units.
(i) The issuance or delivery of certificates for Common Units upon the
conversion of Senior Units shall be made without charge to the converting holder
of Senior Units for such certificates or for any tax in respect of the issuance
or delivery of such certificates or the securities represented thereby, and such
certificates shall be issued or delivered in the respective names of, or in such
names as may be directed by, the holders of the Senior Units converted;
provided, however, that the Partnership shall not be required to pay any tax
which may be payable in respect of any transfer involved in the issuance and
delivery of any such certificate in a name other than that of the holder of the
Senior Units converted, and the Partnership shall not be required to issue or
deliver such certificate unless or until the Person or Persons requesting the
issuance or delivery thereof shall have paid to the Partnership the amount of
such tax or shall have established to the reasonable satisfaction of the
Partnership that such tax has been paid.
(j) The Partnership covenants that all Common Units which may be delivered
upon conversion of Senior Units will be newly issued Common Units, will have
been duly authorized and validly issued and will be fully paid and
non-assessable (except as such non-assessability may be affected by Section
17-607 of the Delaware Act).
(k) The Common Units issued by the Partnership upon conversion of the
Senior Units shall have, as a substantive manner in the hands of a subsequent
holder, like intrinsic economic and federal income tax characteristics in all
material respects, to the intrinsic economic and federal income tax
characteristics of a Common Unit then Outstanding.
Section 5.8 Special Provisions Relating to the Special Limited Partners.
Notwithstanding anything to the contrary set forth in this Agreement, the
Special Limited Partners (a) shall (i) possess the rights and obligations
provided in this Agreement with respect to a Limited Partner pursuant to
Articles VI and VII and (ii) have a Capital Account as a Partner pursuant to
Section 4.5 and all other provisions related thereto and (b) shall not (i) be
entitled to vote on any matters requiring the approval or vote of the holders of
Outstanding Units, (ii) be entitled to any distributions other than to Partners
as specified pursuant to Sections 5.4, 14.3 and 14.4 or (iii) be allocated items
of income, gain, loss or deduction other than as specified in this Article V.
54
Section 5.9 Special Provision Relating to FCI Common Units. Without the prior
written consent of FCI and notwithstanding any other provision of this
Agreement, neither the General Partner nor the Partnership shall declare a
distribution on a Common Unit for any Quarter in an amount in excess of the
Ceiling Quarterly Distribution if the Cumulative FCI Common Unit Arrearage is or
will be, based on that Quarter's distribution, greater than zero.
ARTICLE VI
MANAGEMENT AND OPERATION OF BUSINESS
Section 6.1 Management.
(a) The General Partner shall conduct, direct and manage all activities of
the Partnership. Except as otherwise expressly provided in this Agreement, all
management powers over the business and affairs of the Partnership shall be
exclusively vested in the General Partner, and no Limited Partner or Assignee
shall have any management power over the business and affairs of the
Partnership. In addition to the powers now or hereafter granted a general
partner of a limited partnership under applicable law or which are granted to
the General Partner under any other provision of this Agreement, the General
Partner, subject to Section 6.3, shall have full power and authority to do all
things and on such terms as it, in its sole discretion, may deem necessary or
appropriate to conduct the business of the Partnership, to exercise all powers
set forth in Section 3.2 and to effectuate the purposes set forth in Section
3.1, including, without limitation, (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 (the matters described in this clause (iii) being subject,
however, to any prior approval that may be required by Section 6.3); (iv) the
use of the assets of the Partnership (including, without limitation, cash on
hand) for any purpose consistent with the terms of this Agreement, including,
without limitation, the financing of the conduct of the operations of the
Partnership or the Operating Partnership, the lending of funds to other Persons
(including, without limitation, the Operating Partnership, the General Partner
and Affiliates of the General Partner) and the repayment of obligations of the
Partnership and the Operating Partnership and the making of capital
contributions to the Operating Partnership; (v) the negotiation, execution and
performance of any contracts, conveyances or other instruments (including,
without limitation, 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
55
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 and agents (including, without
limitation, employees having titles such as "president," "vice president,"
"secretary" and "treasurer") 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, the Operating Partnership and the Partners
(including, without limitation, the assets of the Operating Partnership and 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 or other relationships (including, without limitation, the
acquisition of interests in, and the contributions of property to, the Operating
Partnership from time to time); (x) the control of any matters affecting the
rights and obligations of the Partnership, including, without limitation, 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; (xi) the indemnification of any Person against
liabilities and contingencies to the extent permitted by law; (xii) the entering
into of listing agreements with The New York Stock Exchange, Inc. and any other
securities exchange and the delisting of some or all of the Units from, or
requesting that trading be suspended on, any such exchange (subject to any prior
approval that may be required under Section 1.6); (xiii) the purchase, sale or
other acquisition or disposition of Units; and (xiv) the undertaking of any
action in connection with the Partnership's participation in the Operating
Partnership as the limited partner (including, without limitation, contributions
or loans of funds by the Partnership to the Operating Partnership).
(b) Notwithstanding any other provision of this Agreement, the Operating
Partnership Agreement, the Delaware Act or any applicable law, rule or
regulation, each of the Partners and Assignees and each other Person who may
acquire an interest in Units hereby (i) approves, ratifies and confirms the
execution, delivery and performance by the parties thereto of the Operating
Partnership Agreement, the Underwriting Agreement, the Contribution Agreement,
the agreements and other documents filed as exhibits to the Registration
Statement, and the other agreements described in or filed as a part of the
Registration Statement, and the engaging by any Affiliate of the General Partner
in business and activities (other than Restricted Activities) that are in direct
competition with the business and activities of the Partnership and the
Operating Partnership; (ii) agrees that the General Partner (on its own or
through any 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
Registration Statement on behalf of the Partnership without any further act,
approval or vote of the Partners or the Assignees or the other Persons who may
acquire an interest in Units; and (iii) agrees that the execution, delivery or
performance by the General Partner, the Partnership, the Operating Partnership
or any Affiliate of any of them, of this Agreement or any agreement authorized
or permitted under this Agreement (including, without limitation, the exercise
by the General Partner or any Affiliate of the General Partner of the rights
accorded pursuant to Article XVII), or the engaging by any Affiliate of the
General Partner in any business and activities (other than Restricted
Activities) that are in direct competition with the business and activities of
the Partnership and the Operating Partnership, shall not constitute a breach by
the General Partner of any duty that the General Partner may owe the Partnership
or the Limited Partners or the Assignees or any other Persons under this
Agreement (or any other agreements) or of any duty stated or implied by law or
equity. The term "Affiliate" when used in this Section 6.1(b) with respect to
the General Partner shall not include the Partnership or any Subsidiary of the
Partnership.
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Section 6.2 Certificate of Limited Partnership. 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 General Partner in its sole discretion 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. To the extent
that such action is determined by the General Partner in its sole discretion 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. Subject to the terms of Section 7.5(a),
the General Partner 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 or Assignee.
Section 6.3 Restrictions on General Partner's Authority.
(a) The General Partner may not, without written approval of the specific
act by all of the Outstanding Common Units or by other written instrument
executed and delivered by all of the Outstanding Common Units subsequent to the
date of this Agreement, take any action in contravention of this Agreement,
including, without limitation, (i) any act that would make it impossible to
carry on the ordinary business of the Partnership, except as otherwise provided
in this Agreement; (ii) possess Partnership property, or assign any rights in
specific Partnership property, for other than a Partnership purpose; (iii) admit
a Person as a Partner, except as otherwise provided in this Agreement; (iv)
amend this Agreement in any manner, except as otherwise provided in this
Agreement; or (v) transfer its interest as general partner of the Partnership,
except as otherwise provided in this Agreement.
(b) Except as provided in Articles XIV and XVI, the General Partner may not
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
or approve on behalf of the Partnership the sale, exchange or other disposition
of all or substantially all of the assets of the Operating Partnership, without
the approval of the holders of at least a majority of the Outstanding Common
Units; provided, however, that this provision shall not preclude or limit the
General Partner's ability to mortgage, pledge, hypothecate or grant a security
interest in all or substantially all of the Partnership's assets 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. Without the
approval of the holders of at least two-thirds of the Outstanding Common Units,
the General Partner shall not, on behalf of the Partnership, (i) consent to any
amendment to the Operating Partnership Agreement or, except as expressly
permitted by Section 6.9(d), take any action permitted to be taken by a partner
of the Operating Partnership, in either case, that would have a material adverse
effect on the Partnership as a partner of the Operating Partnership or (ii)
except as permitted under Sections 11.2, 13.1 and 13.2 elect or cause the
Partnership to elect a successor general partner of the Operating Partnership.
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(c) Unless approved by the affirmative vote of the holders of at least
two-thirds of the Outstanding Common Units (excluding for purposes of such
determination Common Units owned by the General Partner and its Affiliates), the
General Partner shall not take any action or refuse to take any reasonable
action the effect of which, if taken or not taken, as the case may be, would be
to cause the Partnership or the Operating Partnership to be treated as an
association taxable as a corporation or otherwise to be taxed as an entity for
federal income tax purposes; provided that this Section 6.3(c) shall not be
construed to apply to amendments to this Agreement (which are governed by
Article XV) or mergers or consolidations of the Partnership with any Person
(which are governed by Article XVI).
Section 6.4 Reimbursement of the General Partner.
(a) Except as provided in this Section 6.4 and elsewhere in this Agreement
or in the Operating Partnership Agreement, the General Partner shall not be
compensated for its services as general partner of the Partnership or the
Operating Partnership.
(b) The General Partner shall be reimbursed on a monthly basis, or such
other basis as the General Partner may determine in its sole discretion, for (i)
all direct and indirect expenses it incurs or payments it makes on behalf of the
Partnership (including, without limitation, salary, bonus, incentive
compensation and other amounts paid to any Person to perform services for the
Partnership or for the General Partner 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, without
limitation, expenses allocated to the General Partner by its Affiliates). The
General Partner shall determine the fees and expenses that are allocable to the
Partnership in any reasonable manner determined by the General Partner in its
sole discretion. Reimbursements pursuant to this Section 6.4 shall be in
addition to any reimbursement to the General Partner as a result of
indemnification pursuant to Section 6.7.
(c) Subject to Section 4.3(c), the General Partner 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 and incentive plans (including, without limitation, plans
involving the issuance of Units), or issue Partnership Securities pursuant to
any employee benefit or incentive plan maintained or sponsored by the General
Partner or one of its Affiliates, in each case for the benefit of employees of
the General Partner, the Partnership, the Operating Partnership or any Affiliate
of any of them in respect of services performed, directly or indirectly, for the
benefit of the Partnership or the Operating Partnership. The Partnership agrees
to issue and sell to the General Partner any Units or other Partnership
Securities that the General Partner is obligated to provide to any employees
pursuant to any such benefit or incentive plans. Expenses incurred by the
General Partner in connection with any such plans (including the net cost to the
General Partner of Units purchased by the General Partner from the Partnership
to fulfill options or awards under such plans) shall be reimbursed in accordance
with Section 6.4(b). Any and all obligations of the General Partner under any
employee benefit or incentive plans adopted by the General Partner as permitted
by this Section 6.4(c) shall constitute obligations of the General Partner
hereunder and shall be assumed by any successor General Partner approved
pursuant to Section 13.1 or 13.2 or the transferee of or successor to all of the
General Partner Interest pursuant to Section 11.2.
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Section 6.5 Outside Activities.
(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, the Operating
Partnership and any other partnership of which the Partnership or the Operating
Partnership is, directly or indirectly, a partner and to undertake activities
that are ancillary or related thereto (including being a limited partner in the
Partnership), (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
Operating Partnership Agreement or described in or contemplated by the
Registration Statement and (B) the acquisition, ownership or disposition of
Partnership Interests in the Partnership or partnership interests in the
Operating Partnership or any other partnership of which the Partnership or the
Operating Partnership is, directly or indirectly, a partner, except that,
notwithstanding the foregoing, employees of the General Partner may perform
services for FCI and its Affiliates, and (iii) shall not and shall cause its
Affiliates not to engage in any Restricted Activity.
(b) Except as described in Section 6.5(a), no Indemnitee shall be expressly
or implicitly restricted or proscribed pursuant to this Agreement, the Operating
Partnership Agreement or the partnership relationship established hereby or
thereby from engaging in other activities for profit, whether in the businesses
engaged in by the Partnership or the Operating Partnership or anticipated to be
engaged in by the Partnership, the Operating Partnership or otherwise,
including, without limitation, in the case of any Affiliates of the General
Partner those businesses and activities (other than Restricted Activities) in
direct competition with the business and activities of the Partnership or the
Operating Partnership or otherwise described in or contemplated by the
Registration Statement. Without limitation of and subject to the foregoing each
Indemnitee (other than the General Partner) shall have the right to engage in
businesses of every type and description and to engage in and possess an
interest in other business ventures of any and every type or description,
independently or with others, including, without limitation, in the case of any
Affiliates of the General Partner business interests and activities (other than
Restricted Activities) in direct competition with the business and activities of
the Partnership or the Operating Partnership, and none of the same shall
constitute a breach of this Agreement or any duty to the Partnership, the
Operating Partnership or any Partner or Assignee. Neither the Partnership, the
Operating Partnership, any Limited Partner nor any other Person shall have any
rights by virtue of this Agreement, the Operating Partnership Agreement or the
partnership relationship established hereby or thereby in any business ventures
of any Indemnitee (subject, in the case of the General Partner, to compliance
with Section 6.5(c)) and such Indemnitees shall have no obligation to offer any
interest in any such business ventures to the Partnership, the Operating
Partnership, any Limited Partner or any other Person. The General Partner and
any other Persons affiliated with the General Partner may acquire Units or other
Partnership Securities in addition to those acquired by any of such Persons on
the Initial Closing Date, and, except as otherwise provided in this Agreement,
shall be entitled to exercise all rights of an Assignee or Limited Partner, as
applicable, relating to such Units or Partnership Securities, as the case may
be.
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(c) Subject to the terms of Sections 6.5(a) and (b) but otherwise
notwithstanding anything to the contrary in this Agreement, (i) the competitive
activities of any Indemnitees (other than the General Partner) are 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 duty or any other obligation of
any type whatsoever of the General Partner for the General Partner to permit an
Affiliate of the General Partner to engage, or for any such Affiliate to engage,
in business interests and activities (other than Restricted Activities) in
preference to or to the exclusion of the Partnership.
(d) The term "Affiliates" when used in this Section 6.5 with respect to the
General Partner shall not include the Partnership or any Subsidiary of the
Partnership.
Section 6.6 Loans to and from the General Partner; Contracts with Affiliates.
(a) The General Partner or any Affiliate thereof may lend to the
Partnership or the Operating Partnership, and the Partnership and the Operating
Partnership may borrow, funds needed or desired by the Partnership and the
Operating Partnership for such periods of time as the General Partner may
determine and (ii) the General Partner or any Affiliate thereof may borrow from
the Partnership or the Operating Partnership, and the Partnership and the
Operating Partnership may lend to the General Partner or such Affiliate, excess
funds of the Partnership and the Operating Partnership for such periods of time
and in such amounts as the General Partner may determine; provided, however,
that in either 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 (without reference to the lending party's financial abilities or
guarantees), by unrelated lenders on comparable loans. 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 6.6(a) and Section 6.6(b), the term
"Partnership" shall include any Affiliate of the Partnership that is controlled
by the Partnership and the term "Operating Partnership" shall include any
Affiliate of the Operating Partnership that is controlled by the Operating
Partnership.
(b) The Partnership may lend or contribute to the Operating Partnership,
and the Operating Partnership may borrow, funds on terms and conditions
established in the sole discretion of the General Partner; provided, however,
that the Partnership may not charge the Operating Partnership interest at a rate
greater than the rate that would be charged to the Operating Partnership
(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 General Partner in its sole discretion and shall not create any
right or benefit in favor of the Operating Partnership or any other Person.
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(c) The General Partner may itself, or may enter into an agreement with any
of its Affiliates to, render services to the Partnership or to the General
Partner in the discharge of its duties as general partner of the Partnership.
Any services rendered to the Partnership 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 6.6(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 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), is equitable
to the Partnership. The provisions of Section 6.4 shall apply to the rendering
of services described in this Section 6.6(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 6.6(e) shall be deemed to be satisfied as to (i) the
transactions effected pursuant to Sections 4.1, 4.2 and 4.3, the Contribution
Agreement and any other transactions described in or contemplated by the
Registration 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 the Partnership or the Operating Partnership 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 6.6(a) through 6.6(f), and
notwithstanding anything to the contrary in this Agreement, the existence of the
conflicts of interest described in the Registration Statement are hereby
approved by all Partners.
Section 6.7 Indemnification.
(a) To the fullest extent permitted by law but subject to the limitations
expressly provided in this Agreement, the General Partner, any Departing Partner
and any Person who is or was an officer or director of the General Partner or
any Departing Partner and all other 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, without limitation,
legal fees and expenses), 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 (i) the General Partner, a Departing
Partner or any of their Affiliates, (ii) an officer, director, employee,
partner, agent or trustee of the Partnership, the General Partner, any Departing
Partner or any of their Affiliates or (iii) a Person serving at the request of
the Partnership in another entity in a similar capacity, provided, that in each
case the Indemnitee acted in good faith and in a manner which 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, no indemnification
pursuant to this Section 6.7 shall be available to the General Partner with
respect to its obligations incurred pursuant to the Underwriting Agreement or
the Contribution Agreement (other than obligations incurred by the General
Partner on behalf of the Partnership or the Operating Partnership). 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 6.7 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.
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(b) To the fullest extent permitted by law, expenses (including, without
limitation, legal fees and expenses) incurred by an Indemnitee who is
indemnified pursuant to Section 6.7(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 an undertaking by or on behalf of the
Indemnitee to repay such amount if it shall be determined that the Indemnitee is
not entitled to be indemnified as authorized in this Section 6.7.
(c) The indemnification provided by this Section 6.7 shall be in addition
to any other rights to which an Indemnitee may be entitled under any agreement,
pursuant to any vote of the holders of Outstanding Units, as a matter of law or
otherwise, both as to actions in the Indemnitee's capacity as (i) the General
Partner, a Departing Partner or an Affiliate thereof, (ii) an officer, director,
employee, partner, agent or trustee of the Partnership, the General Partner, any
Departing Partner or an Affiliate thereof or (iii) a Person serving at the
request of the Partnership in another entity in a similar capacity, and as to
actions in any other capacity (including, without limitation, 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 General
Partner or its Affiliates for the cost of) insurance, on behalf of the General
Partner and such other Persons as the General Partner 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 6.7, 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 6.7(a); and action taken or omitted by it with
respect to an 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.
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(f) In no event may an Indemnitee subject the Limited Partners 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 6.7 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 6.7 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 6.7 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 obligation of the Partnership to indemnify any such Indemnitee under and in
accordance with the provisions of this Section 6.7 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.
Section 6.8 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, the
Limited Partners, the Assignees or any other Persons who have acquired interests
in the Units, for losses sustained or liabilities incurred as a result of any
act or omission if such Indemnitee acted in good faith.
(b) Subject to its obligations and duties as General Partner set forth in
Section 6.1(a), the General Partner 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 its agents, and the General Partner shall not be
responsible for any misconduct or negligence on the part of any such agent
appointed by the General Partner in good faith.
(c) Any amendment, modification or repeal of this Section 6.8 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 Partners of the
General Partner, its directors, officers and employees under this Section 6.8 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.
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Section 6.9 Resolution of Conflicts of Interest.
(a) Unless otherwise expressly provided in this Agreement or the Operating
Partnership Agreement, whenever a potential conflict of interest exists or
arises between the General Partner or any of its Affiliates, on the one hand,
and the Partnership, the Operating Partnership, any Partner or any Assignee, on
the other, any resolution or course of action in respect of such conflict of
interest shall be permitted and deemed approved by all Partners, and shall not
constitute a breach of this Agreement, of the Operating Partnership Agreement,
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 General Partner 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, (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 General Partner may also adopt a resolution or course of
action that has not received Special Approval. The General Partner (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
General Partner (including such Audit Committee) determines in its sole
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 General Partner (including such Audit Committee) to
consider the interests of any Person other than the Partnership. In the absence
of bad faith by the General Partner, the resolution, action or terms so made,
taken or provided by the General Partner with respect to such matter shall not
constitute a breach of this Agreement or any other agreement contemplated herein
or a breach of any standard of care or duty imposed herein or therein or under
the Delaware Act or any other law, rule or regulation.
(b) Whenever this Agreement or any other agreement contemplated hereby
provides that the General Partner or any of its Affiliates is permitted or
required to make a decision (i) in its "sole discretion" or "discretion," that
it deems "necessary or appropriate" or under a grant of similar authority or
latitude, the General Partner or such Affiliate shall be entitled to consider
only such interests and factors as it desires and shall have no duty or
obligation to give any consideration to any interest of, or factors affecting,
the Partnership, the Operating Partnership, any Limited Partner or any Assignee,
(ii) it may 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 (iii) in "good faith" or under another
express standard, the
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General Partner or such Affiliate shall act under such express standard and
shall not be subject to any other or different standards imposed by this
Agreement, the Operating Partnership 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 General Partner or such Affiliate consistent
with the standards of "reasonable discretion" set forth in the definitions of
Available Cash or Cash from Operations shall not constitute a breach of any duty
of the General Partner to the Partnership or the Limited Partners. The General
Partner shall have no duty, express or implied, to sell or otherwise dispose of
any asset of the Operating Partnership or of the Partnership, other than in the
ordinary course of business. No borrowing by the Partnership or the Operating
Partnership or the approval thereof by the General Partner shall be deemed to
constitute a breach of any duty of the General Partner to the Partnership or the
Limited Partners by reason of the fact that the purpose or effect of such
borrowing is directly or indirectly to enable Incentive Distributions or to
hasten the expiration of the Arrearage Period.
(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 General Partner, on behalf of
the Partnership as a partner of the Operating Partnership, to approve of actions
by the general partner of the Operating Partnership similar to those actions
permitted to be taken by the General Partner pursuant to this Section 6.9.
Section 6.10 Other Matters Concerning the General Partner.
(a) The General Partner 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 may consult with legal counsel, accountants,
appraisers, management consultants, investment bankers and other consultants and
advisers selected by it, and any act taken or omitted to be taken in reliance
upon the opinion (including, without limitation, an Opinion of Counsel) of such
Persons as to matters that such General Partner 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. Each such attorney shall, to the extent provided by
the General Partner in the power of attorney, have full power and authority to
do and perform each and every act and duty that is permitted or required to be
done by the General Partner hereunder.
(d) 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 as required to permit the General Partner 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 to be in, or not inconsistent with,
the best interests of the Partnership.
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Section 6.11 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 or Assignee,
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, one or more of its Affiliates or one or more nominees, as the General
Partner 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 of its Affiliates or one or more nominees shall be held
by the General Partner or such Affiliate 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 its reasonable efforts to cause
record title to such assets (other than those assets in respect of which the
General Partner 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 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
Partnership. 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.
Section 6.12 Purchase or Sale of Units. The General Partner may cause the
Partnership to purchase or otherwise acquire Units; provided that, except (a) as
permitted pursuant to Section 11.6 and (b) in exchange for other Units or
Partnership Securities that are junior in right of distribution and liquidation
to the Senior Units, the General Partner may not cause the Partnership or any
Subsidiary to directly or indirectly purchase or otherwise acquire Common Units
or any other Units or Partnership Securities that are junior in right of
distribution or liquidation to the Senior Units at any time during which any of
the Senior Units are Outstanding. As long as Units are held by the Partnership
or the Operating Partnership, such Units shall not be considered Outstanding for
any purpose, except as otherwise provided herein. The General Partner or any
Affiliate of the General Partner may also purchase or otherwise acquire and sell
or otherwise dispose of Units for its own account, subject to the provisions of
Articles XI and XII.
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Section 6.13 Registration Rights of Ferrellgas and its Affiliates.
(a) If (i) Ferrellgas or any Affiliate of Ferrellgas (including, without
limitation, for purposes of this Section 6.13, any Person that is an Affiliate
of Ferrellgas at the date hereof notwithstanding that it may later cease to be
an Affiliate of Ferrellgas) holds Units or other Partnership Securities that it
desires to sell and (ii) Rule 144 of the Securities Act (or any successor rule
or regulation to Rule 144) or another exemption from registration is not
available to enable such holder of Units (the "Holder") to dispose of the number
of Units or other securities it desires to sell at the time it desires to do so
without registration under the Securities Act, then upon the request of
Ferrellgas or any of its Affiliates, the Partnership shall file with the
Commission as promptly as practicable after receiving such request, and use all
reasonable efforts to cause to become effective and remain effective for a
period of not more than six months following its effective date, a registration
statement under the Securities Act registering the offering and sale of the
number of Units or other securities specified by the Holder; provided, however,
that the Partnership shall not be required to effect more than three
registrations pursuant to this Section 6.13(a); and provided further, that if
the General Partner or, if at the time a request pursuant to this Section 6.13
is submitted to the Partnership, Ferrellgas or its Affiliate requesting
registration is an Affiliate of the General Partner, the Audit Committee in
connection with Special Approval determines in its good faith judgment that a
postponement of the requested registration for up to six months would be in the
best interests of the Partnership and its Partners due to a pending transaction,
investigation or other event, the filing of such registration statement or the
effectiveness thereof may be deferred for up to six months, but not thereafter.
In connection with any registration pursuant to the immediately preceding
sentence, the Partnership shall promptly prepare and file (x) such documents as
may be necessary to register or qualify the securities subject to such
registration under the securities laws of such states as the Holder shall
reasonably request; provided, however, that no such qualification shall be
required in any jurisdiction where, as a result thereof, the Partnership would
become subject to general service of process or to taxation or qualification to
do business as a foreign corporation or partnership doing business in such
jurisdiction, and (y) such documents as may be necessary to apply for listing or
to list the securities subject to such registration on such National Securities
Exchange as the Holder shall reasonably request, and do any and all other acts
and things that may reasonably be necessary or advisable to enable the Holder to
consummate a public sale of such Units in such states. Except as set forth in
Section 6.13(c), all costs and expenses of any such registration and offering
(other than the underwriting discounts and commissions) shall be paid by the
Partnership, without reimbursement by the Holder.
(b) If the Partnership shall at any time propose to file a registration
statement under the Securities Act for an offering of equity securities of the
Partnership for cash (other than an offering relating solely to an employee
benefit plan), the Partnership shall use all reasonable efforts to include such
number or amount of securities held by the Holder in such registration statement
as the Holder shall request. If the proposed offering pursuant to this Section
6.13(b) shall be an underwritten offering, then, in the event that the managing
underwriter of such offering advises the Partnership and the Holder in writing
that in its opinion the inclusion of all or some of the Holder's securities
would adversely and materially affect the success of the offering, the
Partnership shall include in such offering only that number or amount, if any,
of securities held by the Holder which, in the opinion of the managing
underwriter, will not so adversely and materially affect the offering. Except as
set forth in Section 6.13(c), all costs and expenses of any such registration
and offering (other than the underwriting discounts and commissions) shall be
paid by the Partnership, without reimbursement by the Holder.
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(c) If underwriters are engaged in connection with any registration
referred to in this Section 6.13, the Partnership shall provide indemnification,
representations, covenants, opinions and other assurance to the underwriters in
form and substance reasonably satisfactory to such underwriters. Further, in
addition to and not in limitation of the Partnership's obligation under Section
6.7, the Partnership shall, to the fullest extent permitted by law, indemnify
and hold harmless the Holder, its officers, directors and each Person who
controls the Holder (within the meaning of the Securities Act) and any agent
thereof (collectively, "Indemnified Persons") against any losses, claims,
demands, actions, causes of action, assessments, damages, liabilities (joint or
several), costs and expenses (including, without limitation, interest, penalties
and reasonable attorneys' fees and disbursements), resulting to, imposed upon,
or incurred by the Indemnified Persons, directly or indirectly, under the
Securities Act or otherwise (hereinafter referred to in this Section 6.13(c) as
a "claim" and in the plural as "claims"), based upon, arising out of, or
resulting from any untrue statement or alleged untrue statement of any material
fact contained in any registration statement under which any Units were
registered under the Securities Act or any state securities or Blue Sky laws, in
any preliminary prospectus (if used prior to the effective date of such
registration statement), or in any summary or final prospectus or in any
amendment or supplement thereto (if used during the period the Partnership is
required to keep the registration statement current), or arising out of, based
upon or resulting from the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
made therein not misleading; provided, however, that the Partnership shall not
be liable to any Indemnified Person to the extent that any such claim arises out
of, is based upon or results from an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
such preliminary, summary or final prospectus or such amendment or supplement,
in reliance upon and in conformity with written information furnished to the
Partnership by or on behalf of such Indemnified Person specifically for use in
the preparation thereof.
(d) The provisions of Sections 6.13(a) and 6.13(b) shall continue to be
applicable with respect to Ferrellgas (and any of Ferrellgas' Affiliates) after
it ceases to be a Partner of the Partnership, during a period of two years
subsequent to the effective date of such cessation and for so long thereafter as
is required for the Holder to sell all of the Units or other securities of the
Partnership with respect to which it has requested during such two year period
that a registration statement be filed; provided, however, that the Partnership
shall not be required to file successive registration statements covering the
same securities for which registration was demanded during such two-year period.
The provisions of Section 6.13(c) shall continue in effect thereafter.
(e) Any request to register Partnership Securities pursuant to this Section
6.13 shall (i) specify the Partnership Securities intended to be offered and
sold by the Person making the request, (ii) express such Person's present intent
to offer such shares for distribution, (iii) describe the nature or method of
the proposed offer and sale of Partnership Securities, and (iv) contain the
undertaking of such Person to provide all such information and materials and
take all action as may be required in order to permit the Partnership to comply
with all applicable requirements in connection with the registration of such
Partnership Securities.
Section 6.14 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 General Partner and any officer of the Partnership
authorized by the General Partner to act on behalf and in the name of the
Partnership 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
General Partner or any such officer as if it were the Partnership's sole party
in interest, both legally and beneficially. Each Limited Partner hereby waives
any and all defenses or other remedies that may be available against such Person
to contest, negate or disaffirm any action of the General Partner or any such
officer in connection with any such dealing. In no event shall any Person
dealing with the General Partner or any such officer or its representatives be
obligated to ascertain that the terms of this Agreement have been complied with
or to inquire into the necessity or expedience of any act or action of the
General Partner or any such officer. Each and every certificate, document or
other instrument executed on behalf of the Partnership by the General Partner or
any such officer 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.
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ARTICLE VII
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
Section 7.1 Limitation of Liability. The Limited Partners and the Assignees
shall have no liability under this Agreement except as expressly provided in
this Agreement or the Delaware Act.
Section 7.2 Management of Business. No Limited Partner or Assignee (other
than the General Partner, any of its Affiliates or any officer, director,
employee, partner, agent or trustee of the General Partner or any of its
Affiliates, in its capacity as such, if such Person shall also be a Limited
Partner or Assignee) shall participate in the operation, management or control
(within the meaning 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. The transaction of any such business by the
General Partner, any of its Affiliates or any member, officer, director,
employee, partner, agent or trustee of the General Partner or any of its
Affiliates, in its capacity as such, shall not affect, impair or eliminate the
limitations on the liability of the Limited Partners or Assignees under this
Agreement.
Section 7.3 Outside Activities. Subject to the provisions of Section 6.5,
which shall continue to be applicable to the Persons referred to therein,
regardless of whether such Persons shall also be Limited Partners or Assignees,
any Limited Partner or Assignee shall be entitled to and may have business
interests and engage in business activities in addition to those relating to the
Partnership, including, without limitation, business interests and activities in
direct competition with the Partnership or the Operating Partnership. Neither
the Partnership nor any of the other Partners or Assignees shall have any rights
by virtue of this Agreement in any business ventures of any Limited Partner or
Assignee.
Section 7.4 Return of Capital. No Limited Partner or Assignee shall be
entitled to the withdrawal or return of its Capital Contribution, except to the
extent, if any, that distributions made pursuant to this Agreement or upon
termination of the Partnership may be considered as such by law and then only to
the extent provided for in this Agreement. Except to the extent provided by
Article V or as otherwise expressly provided in this Agreement, no Limited
Partner or Assignee shall have priority over any other Limited Partner or
Assignee either as to the return of Capital Contributions or as to profits,
losses or distributions. Any such return shall be a compromise to which all
Partners and Assignees agree within the meaning of ss. 17-502(b) of the Delaware
Act.
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Section 7.5 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 7.5(b), each Limited Partner 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 such
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 him, upon notification to the General Partner, a
current list of the name and last known business, residence or mailing address
of each Partner;
(iv) to have furnished to him, upon notification to the General Partner, 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 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) Notwithstanding any other provision of this Agreement, the General
Partner may keep confidential from the Limited Partners and Assignees, for such
period of time as the General Partner deems reasonable, any information that the
General Partner reasonably believes to be in the nature of trade secrets or
other information the disclosure of which the General Partner in good faith
believes is not in the best interests of the Partnership or the Operating
Partnership or could damage the Partnership or the Operating Partnership or that
the Partnership or the Operating Partnership are 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 7.5).
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ARTICLE VIII
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 8.1 Records and Accounting. The General Partner 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, without
limitation, all books and records necessary to provide to the Limited Partners
any information, lists and copies of documents required to be provided pursuant
to Section 7.5(a). Any books and records maintained by or on behalf of the
Partnership in the regular course of its business, including, without
limitation, the record of the Record Holders and Assignees of Units or other
Partnership Securities, 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 both tax and financial reporting
purposes, on an accrual basis in accordance with generally accepted accounting
principles.
Section 8.2 Fiscal Year. The fiscal year of the Partnership shall be August
1 to July 31.
Section 8.3 Reports.
(a) As soon as practicable, but in no event later than 120 days after the
close of each fiscal year of the Partnership, the General Partner shall cause to
be mailed to each Record Holder of a Unit as of a date selected by the General
Partner in its sole discretion, an annual report containing financial statements
of the Partnership for such fiscal year of the Partnership, presented in
accordance with generally accepted accounting principles, including a balance
sheet and statements of operations, Partners' equity and cash flows, such
statements to be audited by a firm of independent public accountants selected by
the General Partner.
(b) As soon as practicable, but in no event later than 90 days after the
close of each Quarter except the last Quarter of each year, the General Partner
shall cause to be mailed to each Record Holder of a Unit, as of a date selected
by the General Partner in its sole discretion, a report containing unaudited
financial statements of the Partnership and such other information as may be
required by applicable law, regulation or rule of any National Securities
Exchange on which the Units are listed for trading, or as the General Partner
determines to be necessary or appropriate.
ARTICLE IX
TAX MATTERS
Section 9.1 Preparation of Tax Returns. The General Partner shall arrange
for the preparation and timely filing of all returns of Partnership income,
gains, deductions, losses and other items required of the Partnership for
federal and state income tax purposes and shall use all reasonable efforts to
furnish, within 90 days of the close of each calendar year, the tax information
reasonably required by holders of Outstanding Units for federal and state income
tax reporting purposes. 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. The taxable year of the
Partnership shall be August 1 to July 31.
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Section 9.2 Tax Elections. Except as otherwise provided herein, the General
Partner shall, in its sole discretion, determine whether to make any available
election pursuant to the Code; provided, however, that the General Partner shall
make the election under Section 754 of the Code in accordance with applicable
regulations thereunder. The General Partner shall have the right to seek to
revoke any such election (including, without limitation, the election under
Section 754 of the Code) upon the General Partner's determination in its sole
discretion that such revocation is in the best interests of the Limited Partners
and Assignees. For purposes of computing the adjustments under Section 743(b) of
the Code, the General Partner shall be authorized (but not required) to adopt a
convention whereby the price paid by a transferee of Units will be deemed to be
the lowest quoted closing price of the Units on any National Securities Exchange
on which such Units are traded during the calendar month in which such transfer
is deemed to occur pursuant to Section 5.2(g) without regard to the actual price
paid by such transferee.
Section 9.3 Tax Controversies. Subject to the provisions hereof, the
General Partner is designated the Tax Matters Partner (as defined in Section
6231 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, without limitation,
resulting administrative and judicial proceedings, and to expend Partnership
funds for professional services and costs associated therewith. Each Partner and
Assignee 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.
Section 9.4 Organizational Expenses. The Partnership shall elect to deduct
expenses, if any, incurred by it in organizing the Partnership ratably over a
60-month period as provided in Section 709 of the Code.
Section 9.5 Withholding. Notwithstanding any other provision of this
Agreement, the General Partner is authorized to take any action that it
determines in its sole discretion to be necessary or appropriate to cause the
Partnership and the Operating 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 to withhold and pay
over to any taxing authority any amount resulting from the allocation or
distribution of income to any Partner or Assignee (including, without
limitation, by reason of Section 1446 of the Code), the amount withheld shall be
treated as a distribution of cash pursuant to Section 5.3 in the amount of such
withholding from such Partner.
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Section 9.6 Entity-Level Taxation. If legislation is enacted or the
interpretation of existing language is modified which causes the Partnership or
the Operating Partnership to be treated as an association taxable as a
corporation or otherwise subjects the Partnership or the Operating Partnership
to entity-level taxation for federal income tax purposes, the Minimum Quarterly
Distribution, First Target Distribution, Second Target Distribution or Third
Target Distribution, as the case may be, shall be equal to the product obtained
by multiplying (a) the amount thereof by (b) 1 minus the sum of (i) the highest
marginal federal corporate (or other entity, as applicable) income tax rate of
the Partnership for the taxable year of the Partnership in which such Quarter
occurs (expressed as a percentage) plus (ii) the effective overall state and
local income tax rate (expressed as a percentage) applicable to the Partnership
for the calendar year next preceding the calendar year in which such Quarter
occurs (after taking into account the benefit of any deduction allowable for
federal income tax purposes with respect to the payment of state and local
income taxes), but only to the extent of the increase in such rates resulting
from such legislation or interpretation. Such effective overall state and local
income tax rate shall be determined for the taxable year next preceding the
first taxable year during which the Partnership or the Operating Partnership is
taxable for federal income tax purposes as an association taxable as a
corporation or is otherwise subject to entity-level taxation by determining such
rate as if the Partnership or the Operating Partnership had been subject to such
state and local taxes during such preceding taxable year.
Section 9.7 Entity-Level Arrearage Collections. If the Partnership is
required by applicable law to pay any federal, state or local income tax on
behalf of, or withhold such amount with respect to, any Partner or Assignee or
any former Partner or Assignee in respect of Common Units held by such Person
(a) the General Partner shall cause the Partnership to pay such tax on behalf of
such Partner or Assignee or former Partner or Assignee from the funds of the
Partnership; (b) any amount so paid on behalf of, or withheld with respect to,
any such Partner or Assignee shall constitute a distribution out of Available
Cash to such Partner or Assignee pursuant to Section 5.3; provided, however, in
the discretion of the General Partner, such taxes (if pertaining to all such
Partners) may be considered to be cash disbursements of the Partnership which
reduce Available Cash, but the payment or withholding thereof shall not be
deemed to be a distribution of Available Cash to such Partners; and (c) to the
extent any such Partner or Assignee (but not a former Partner or Assignee) is
not then entitled to such distribution under this Agreement, the General Partner
shall be authorized, without the approval of any Partner or Assignee, to amend
this Agreement insofar as is necessary to maintain the uniformity of intrinsic
tax characteristics as to all Common Units and to make subsequent adjustments to
distributions in a manner which, in the reasonable judgment of the General
Partner, will make as little alteration as practicable in the priority and
amount of distributions otherwise applicable under this Agreement, and will not
otherwise alter the distributions to which Partners and Assignees are entitled
under this Agreement. If the Partnership is permitted (but not required) by
applicable law to pay any such tax on behalf of, or withhold such amount with
respect to, any Partner or Assignee or former Partner or Assignee with respect
to Common Units held by such Person, the General Partner shall be authorized
(but not required) upon the affirmative vote of the holders of at least a
majority of the Outstanding Senior Units, if any, to cause the Partnership to
pay such tax from the funds of the Partnership and to take any action consistent
with this Section 9.7. The General Partner shall be authorized (but not
required) to take all necessary or appropriate actions to collect all or any
portion of a deficiency in the payment of any such tax that relates to prior
periods and that is attributable to Persons who were Limited Partners or
Assignees with respect to Common Units held by such Person when such
deficiencies arose, from such Persons. The payment of taxes by the Partnership
on behalf of Limited Partners holding Senior Units will not satisfy the
obligation of the Partnership to pay the Senior Unit Distribution.
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Section 9.8 Opinions of Counsel. Notwithstanding any other provision of
this Agreement, if the Partnership or the Operating Partnership is treated as an
association taxable as a corporation at any time or is otherwise taxable for
federal income tax purposes as an entity at any time and, pursuant to the
provisions of this Agreement, an Opinion of Counsel would otherwise be required
to the effect that an action will not cause the Partnership or the Operating
Partnership to become so treated as an association taxable as a corporation or
otherwise taxable as an entity for federal income tax purposes, such requirement
for an Opinion of Counsel shall be deemed automatically waived.
ARTICLE X
CERTIFICATES
Section 10.1 Certificates. Upon the Partnership's issuance of Common Units
or Senior Units to any Person, the Partnership shall issue one or more
Certificates in the name of such Person evidencing the number of such Units
being so issued. Certificates shall be executed on behalf of the Partnership by
the General Partner. No Common Unit Certificate shall be valid for any purpose
until it has been countersigned by the Transfer Agent; provided, however, that
if the General Partner elects to issue Units in global or book-entry form, the
Certificates shall be valid upon receipt of a certificate from the Transfer
Agent certifying that such Units have been duly registered in accordance with
the directions of the Partnership. The Partners holding Certificates evidencing
Senior Units may exchange such Certificates for Certificates evidencing Common
Units on or after the date on which such Senior Units are converted into Common
Units pursuant to the terms of Section 5.7(d). The General Partner Units need
not be certificated, but upon request of the General Partner, may be represented
by Certificates in the same manner as the Common Units or Senior Units.
Section 10.2 Registration, Registration of Transfer and Exchange.
(a) The General Partner shall cause to be kept on behalf of the Partnership
a register in which, subject to such reasonable regulations as it may prescribe
and subject to the provisions of Section 10.2(b), the General Partner will
provide for the registration and transfer of Units. The Transfer Agent is hereby
appointed registrar and transfer agent for the purpose of registering Common
Units and transfers of such Common Units as herein provided. The Partnership
shall not recognize transfers of Certificates representing Units unless same are
effected in the manner described in this Section 10.2. Upon surrender for
registration of transfer of any Units evidenced by a Certificate, and subject to
the provisions of Section 10.2(b), the General Partner on behalf of the
Partnership shall execute, and in the case of Common Units, the Transfer Agent
shall countersign, and deliver (or, in the case of Units issued in global or
book-entry form, register in accordance with the rules and regulations of the
Depositary), in the name of the holder or the designated transferee or
transferees, as required pursuant to the holder's instructions, one or more new
Certificates evidencing the same aggregate number of Units as was evidenced by
the Certificate so surrendered.
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(b) Except as otherwise provided in Section 11.5, the Partnership shall not
recognize any transfer of Units until the Certificates evidencing such Units are
surrendered for registration of transfer and such Certificates are accompanied
by a Transfer Application duly executed by the transferee (or the transferee's
attorney-in-fact duly authorized in writing). No charge shall be imposed by the
Partnership for such transfer, provided, that as a condition to the issuance of
any new Certificate under this Section 10.2, the General Partner may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed with respect thereto.
Section 10.3 Mutilated, Destroyed, Lost or Stolen Certificates.
(a) If any mutilated Certificate is surrendered to the Transfer Agent, the
General Partner on behalf of the Partnership shall execute, and upon its request
the Transfer Agent shall countersign and deliver in exchange therefor, a new
Certificate evidencing the same number of Units as the Certificate so
surrendered.
(b) The General Partner on behalf of the Partnership shall execute, and
upon its request, in the case of Common Units, the Transfer Agent shall
countersign and deliver (or, in the case of Units issued in global or book-entry
form, register in accordance with the rules and regulations of the Depositary) a
new Certificate in place of any Certificate previously issued if the Record
Holder of the Certificate:
(i) makes proof by affidavit, in form and substance satisfactory to the
General Partner, that a previously issued Certificate has been lost, destroyed
or stolen;
(ii) requests the issuance of a new Certificate before the Partnership has
notice that the Certificate has been acquired by a purchaser for value in good
faith and without notice of an adverse claim;
(iii) if requested by the General Partner, delivers to the Partnership a
bond, in form and substance satisfactory to the General Partner, with surety or
sureties and with fixed or open penalty as the General Partner may reasonably
direct, in its sole discretion, to indemnify the Partnership, the General
Partner and the Transfer Agent against any claim that may be made on account of
the alleged loss, destruction or theft of the Certificate; and
(iv) satisfies any other reasonable requirements imposed by the General
Partner.
If a Limited Partner or Assignee fails to notify the Partnership within a
reasonable time after he has notice of the loss, destruction or theft of a
Certificate, and a transfer of the Units represented by the Certificate is
registered before the Partnership, the General Partner or the Transfer Agent
receives such notification, the Limited Partner or Assignee shall be precluded
from making any claim against the Partnership, the General Partner or the
Transfer Agent for such transfer or for a new Certificate.
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(c) As a condition to the issuance of any new Certificate under this
Section 10.3, the General Partner may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including, without limitation, the fees and
expenses of the Transfer Agent) reasonably connected therewith.
Section 10.4 Record Holder. In accordance with Section 10.2(b), the
Partnership shall be entitled to recognize the Record Holder as the Limited
Partner or Assignee with respect to any Units and, accordingly, shall not be
bound to recognize any equitable or other claim to or interest in such Units on
the part of any other Person, whether or not the Partnership shall have actual
or other notice thereof, except as otherwise provided by law or any applicable
rule, regulation, guideline or requirement of any National Securities Exchange
on which the Units are listed for trading. Without limiting the foregoing, when
a Person (such as a broker, dealer, bank, trust company or clearing corporation
or an agent of any of the foregoing) is acting as nominee, agent or in some
other representative capacity for another Person in acquiring and/or holding
Units, as between the Partnership on the one hand, and such other Persons, on
the other, such representative Person (a) shall be the Limited Partner or
Assignee (as the case may be) of record and beneficially, (b) must execute and
deliver a Transfer Application and (c) shall be bound by this Agreement and
shall have the rights and obligations of a Limited Partner or Assignee (as the
case may be) hereunder and as provided for herein.
ARTICLE XI
TRANSFER OF INTERESTS
Section 11.1 Transfer.
(a) The term "transfer," when used in this Article XI with respect to a
Partnership Interest, shall be deemed to refer to a transaction by which the
General Partner assigns its General Partner Interest to another Person, by which
the holder of a Unit assigns such Unit to another Person who is or becomes an
Assignee or by which a Special Limited Partner holding an IDR assigns such IDR
to another Person, and includes a sale, assignment, gift, pledge, encumbrance,
hypothecation, mortgage, exchange or any other disposition by law or otherwise.
(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 XI.
Any transfer or purported transfer of a Partnership Interest not made in
accordance with this Article XI shall be null and void.
(c) Nothing contained in this Article XI shall be construed to prevent a
disposition by the parent entity of the General Partner of any or all of the
issued and outstanding capital stock of the General Partner.
(d) Nothing contained in this Article XI, or elsewhere in this Partnership
Agreement, shall preclude the settlement of any transactions involving Common
Units entered into through the facilities of the New York Stock Exchange.
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Section 11.2 Transfer of the General Partner Interest. Except for a
transfer by the General Partner of all, but not less than all, of its General
Partner Interest to (a) an Affiliate of the General Partner or (b) another
Person in connection with the merger or consolidation of the General Partner
with or into another Person or the transfer by the General Partner of all or
substantially all of its assets to another Person, the transfer by the General
Partner of all or any part of its General Partner Interest to a Person prior to
July 31, 2004 shall be subject to the prior approval of at least a majority of
the Outstanding Common Units (excluding for purposes of such determination Units
owned by the General Partner and its Affiliates). Notwithstanding anything
herein to the contrary, no transfer by the General Partner of all or any part of
its General Partner Interest to another Person shall be permitted unless (i) the
transferee agrees to assume the rights and duties of the General Partner under
this Agreement and the Operating Partnership Agreement and to be bound by the
provisions of this Agreement and the Operating Partnership Agreement, (ii) the
Partnership receives an Opinion of Counsel that such transfer would not result
in the loss of limited liability of any Limited Partner or of any limited
partner of the Operating Partnership or cause the Partnership or any of the
Operating Partnership to be treated as an association taxable as a corporation
or otherwise to be taxed as an entity for federal income tax purposes and (iii)
such transferee also agrees to purchase all (or the appropriate portion thereof,
if applicable) of the partnership interest of the General Partner as the general
partner of the Operating Partnership. In the case of a transfer pursuant to and
in compliance with this Section 11.2, the transferee or successor (as the case
may be) shall, subject to compliance with the terms of Section 12.3, be admitted
to the Partnership as a General Partner immediately prior to the transfer of the
General Partner Interest, and the business of the Partnership shall continue
without dissolution.
Section 11.3 Transfer of Units (other than General Partner Units).
(a) Units (other than General Partner Units) may be transferred only in the
manner described in Section 10.2. The transfer of any Units (other than General
Partner Units) and the admission of any new Partner shall not constitute an
amendment to this Agreement.
(b) Until admitted as a Substituted Limited Partner pursuant to Article
XII, the Record Holder of a Unit shall be an Assignee in respect of such Unit.
Limited Partners may include custodians, nominees, or any other individual or
entity in its own or any representative capacity.
(c) Each distribution in respect of Units shall be paid by the Partnership,
directly or through the Transfer Agent or through any other Person or agent,
only to the Record Holders thereof as of the Record Date set for the
distribution. Such payment shall constitute full payment and satisfaction of the
Partnership's liability in respect of such payment, regardless of any claim of
any Person who may have an interest in such payment by reason of an assignment
or otherwise.
(d) A transferee who has completed and delivered a Transfer Application
shall be deemed to have (i) requested admission as a Substituted Limited
Partner, (ii) agreed to comply with and be bound by and to have executed this
Agreement, (iii) represented and warranted that such transferee has the right,
power and authority and, if an individual, the capacity to enter into this
Agreement, (iv) granted the powers of attorney set forth in this Agreement and
(v) given the consents and approvals and made the waivers contained in this
Agreement.
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Section 11.4 Restrictions on Transfers. Notwithstanding the other
provisions of this Article XI, no transfer of any Unit or interest therein of
any Limited Partner, Special Limited Partner or Assignee shall be made if such
transfer would (a) violate the then applicable federal or state securities laws
or rules and regulations of the Securities and Exchange Commission, any state
securities commission or any other governmental authorities with jurisdiction
over such transfer, (b) result in the taxation of the Partnership or the
Operating Partnership as an association taxable as a corporation or otherwise
subject the Partnership or the Operating Partnership to entity-level taxation
for federal income tax purposes or (c) affect the Partnership's or the Operating
Partnership's existence or qualification as a limited partnership under the
Delaware Act.
Section 11.5 Citizenship Certificates; Non-citizen Assignees.
(a) If the Partnership or the Operating Partnership is or becomes subject
to any federal, state or local law or regulation that, in the reasonable
determination of the General Partner, creates a substantial risk of cancellation
or forfeiture of any property in which the Partnership or the Operating
Partnership has an interest based on the nationality, citizenship or other
related status of a Limited Partner or Assignee, the General Partner may request
any Limited Partner or Assignee to furnish to the General Partner, within 30
days after receipt of such request, an executed Citizenship Certification or
such other information concerning his nationality, citizenship or other related
status (or, if the Limited Partner or Assignee is a nominee holding for the
account of another Person, the nationality, citizenship or other related status
of such Person) as the General Partner may request. If a Limited Partner or
Assignee fails to furnish to the General Partner within the aforementioned
30-day period such Citizenship Certification or other requested information or
if upon receipt of such Citizenship Certification or other requested information
the General Partner determines, with the advice of counsel, that a Limited
Partner or Assignee is not an Eligible Citizen, the Units owned by such Limited
Partner or Assignee shall be subject to redemption in accordance with the
provisions of Section 11.6. In addition, the General Partner may require that
the status of any such Limited Partner or Assignee be changed to that of a
Non-citizen Assignee, and, thereupon, the General Partner shall be substituted
for such Non-citizen Assignee as the Limited Partner in respect of his Units.
(b) The General Partner shall, in exercising voting rights in respect of
Units held by it on behalf of Non-citizen Assignees, distribute the votes in the
same ratios as the votes of Limited Partners in respect of Units other than
those of Non-citizen Assignees are cast, either for, against or abstaining as to
the matter.
(c) Upon dissolution of the Partnership, a Non-citizen Assignee shall have
no right to receive a distribution in kind pursuant to Section 14.4 but shall be
entitled to the cash equivalent thereof, and the General Partner shall provide
cash in exchange for an assignment of the Non-citizen Assignee's share of the
distribution in kind. Such payment and assignment shall be treated for
Partnership purposes as a purchase by the General Partner from the Non-citizen
Assignee of his Partnership Interest (representing his right to receive his
share of such distribution in kind).
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(d) At any time after he can and does certify that he has become an
Eligible Citizen, a Non-citizen Assignee may, upon application to the General
Partner, request admission as a Substituted Limited Partner with respect to any
Units of such Non-citizen Assignee not redeemed pursuant to Section 11.6, and
upon his admission pursuant to Section 12.2 the General Partner shall cease to
be deemed to be the Limited Partner in respect of the Non-citizen Assignee's
Units.
Section 11.6 Redemption of Interests.
(a) If at any time a Limited Partner or Assignee fails to furnish a
Citizenship Certification or other information requested within the 30-day
period specified in Section 11.5(a), or if upon receipt of such Citizenship
Certification or other information the General Partner determines, with the
advice of counsel, that a Limited Partner or Assignee is not an Eligible
Citizen, the Partnership may, unless the Limited Partner or Assignee establishes
to the satisfaction of the General Partner that such Limited Partner or Assignee
is an Eligible Citizen or has transferred his Units to a Person who furnishes a
Citizenship Certification to the General Partner prior to the date fixed for
redemption as provided below, redeem the Partnership Interest of such Limited
Partner or Assignee as follows:
(i) The General Partner shall, not later than the 30th day before the date
fixed for redemption, give notice of redemption to the Limited Partner or
Assignee, at his last address designated on the records of the Partnership or
the Transfer Agent, by registered or certified mail, postage prepaid. The notice
shall be deemed to have been given when so mailed. The notice shall specify the
Redeemable Units, the date fixed for redemption, the place of payment, that
payment of the redemption price will be made upon surrender of the Certificate
evidencing the Redeemable Units and that on and after the date fixed for
redemption no further allocations or distributions to which the Limited Partner
or Assignee would otherwise be entitled in respect of the Redeemable Units will
accrue or be made.
(ii) The aggregate redemption price for Redeemable Units shall be an amount
equal to the Current Market Price (the date of determination of which shall be
the date fixed for redemption) of Units of the class to be so redeemed
multiplied by the number of Units of each such class included among the
Redeemable Units. The redemption price shall be paid, in the sole discretion of
the General Partner, in cash or by delivery of a promissory note of the
Partnership in the principal amount of the redemption price, bearing interest at
the rate of 10% annually and payable in three equal annual installments of
principal together with accrued interest, commencing one year after the
redemption date.
(iii) Upon surrender by or on behalf of the Limited Partner or Assignee, at
the place specified in the notice of redemption, of the Certificate evidencing
the Redeemable Units, duly endorsed in blank or accompanied by an assignment
duly executed in blank, the Limited Partner or Assignee or his duly authorized
representative shall be entitled to receive the payment therefor.
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(iv) After the redemption date, Redeemable Units shall no longer constitute
issued and Outstanding Units.
(b) The provisions of this Section 11.6 shall also be applicable to Units
held by a Limited Partner or Assignee as nominee of a Person determined to be
other than an Eligible Citizen.
(c) Nothing in this Section 11.6 shall prevent the recipient of a notice of
redemption from transferring his Units before the redemption date if such
transfer is otherwise permitted under this Agreement. Upon receipt of notice of
such a transfer, the General Partner shall withdraw the notice of redemption,
provided, the transferee of such Units certifies in the Transfer Application
that he is an Eligible Citizen. If the transferee fails to make such
certification, such redemption shall be effected from the transferee on the
original redemption date.
Section 11.7 Transfer of IDRs. A Special Limited Partner holding IDRs may
transfer any or all of the IDRs held by such Special Limited Partner. The
General Partner shall have the authority (but shall not be required) to adopt
such reasonable restrictions on the transfer of IDRs, consistent with the
restrictions on transfer of Units provided for in this Agreement, and
requirements for registering the transfer of IDRs as the General Partner, in its
sole discretion, shall determine are necessary or appropriate including, without
limitation, if the General Partner shall so determine, in its sole discretion,
the right of the Partnership to redeem IDRs upon terms and conditions similar to
those applicable to Units.
ARTICLE XII
ADMISSION OF PARTNERS
Section 12.1 Admission of Initial Limited Partners. On the Initial Closing
Date, the General Partner was admitted to the Partnership as a Limited Partner
in respect of the Common Units and Subordinated Units issued to it and as a
Special Limited Partner in respect of the IDRs issued to it, and the
Underwriters were admitted to the Partnership as Initial Limited Partners.
Section 12.2 Admission of Substituted Limited Partners. By transfer of a
Unit (other than a General Partner Unit) in accordance with Article XI, the
transferor shall be deemed to have given the transferee the right to seek
admission as a Substituted Limited Partner subject to the conditions of, and in
the manner permitted under, this Agreement. A transferor of a Certificate (other
than a Certificate representing a General Partner Unit) shall, however, only
have the authority to convey to a purchaser or other transferee who does not
execute and deliver a Transfer Application (a) the right to negotiate such
Certificate to a purchaser or other transferee and (b) the right to transfer the
right to request admission as a Substituted Limited Partner to such purchaser or
other transferee in respect of the transferred Units. Each transferee of a Unit
(other than a General Partner Unit) (including, without limitation, any nominee
holder or an agent acquiring such Unit for the account of another Person) who
executes and delivers a Transfer Application shall, by virtue of such execution
and delivery, be an Assignee and be deemed to have applied to become a
Substituted Limited Partner with respect to the Units so transferred to such
Person. Such Assignee shall become a Substituted Limited Partner (x) at such
time as the General Partner consents thereto, which consent may be given or
withheld in the General Partner's sole discretion, and (y) when any such
admission is shown on the books and records of the Partnership. If such consent
is withheld, such transferee shall be an Assignee. An Assignee shall have an
interest in the Partnership equivalent to that of a Limited Partner with respect
to allocations and distributions, including, without limitation, liquidating
distributions, of the Partnership. With respect to voting rights attributable to
Units that are held by Assignees, the General Partner shall be deemed to be the
Limited Partner with respect thereto and shall, in exercising the voting rights
in respect of such Units on any matter, vote such Units at the written direction
of the Assignee who is the Record Holder of such Units. If no such written
direction is received, such Units will not be voted. An Assignee shall have no
other rights of a Limited Partner.
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Section 12.3 Admission of Successor General Partner. A successor General
Partner approved pursuant to Section 13.1 or 13.2 or the transferee of or
successor to all of the General Partner Interest pursuant to Section 11.2 who is
proposed to be admitted as a successor General Partner shall be admitted to the
Partnership as the General Partner, effective immediately prior to the
withdrawal or removal of the General Partner pursuant to Section 13.1 or 13.2 or
the transfer of the General Partner Interest pursuant to Section 11.2; provided,
however, that no such successor shall be admitted to the Partnership until
compliance with the terms of Section 11.2 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 and Operating Partnership without
dissolution.
Section 12.4 Admission of Additional Limited Partners.
(a) A Person (other than the General Partner, an Initial Limited Partner 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 General
Partner (i) evidence of acceptance in form satisfactory to the General Partner
of all of the terms and conditions of this Agreement, including, without
limitation, the power of attorney granted in Section 1.4, and (ii) such other
documents or instruments as may be required in the discretion of the General
Partner to effect such Person's admission as an Additional Limited Partner.
(b) Notwithstanding anything to the contrary in this Section 12.4, no
Person shall be admitted as an Additional Limited Partner without the consent of
the General Partner, which consent may be given or withheld in the General
Partner's sole 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 General Partner to such admission.
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(c) Upon the issuance by the Partnership of Senior Units to WNGL pursuant
to the WNGL Purchase Agreement and the execution and delivery in writing
evidencing WNGL's acceptance of all of the terms and conditions of this
Agreement, including, without limitation, the power of attorney granted in
Section 1.4, the General Partner shall admit WNGL to the Partnership as an
Additional Limited Partner on the WNGL Closing Date.
Section 12.5 Amendment of Agreement and Certificate of Limited Partnership.
To effect the admission to the Partnership of any Partner, the General Partner
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 practical an amendment of this Agreement and, if required by
law, to prepare and file an amendment to the Certificate of Limited Partnership
and may for this purpose, among others, exercise the power of attorney granted
pursuant to Section 1.4.
ARTICLE XIII
WITHDRAWAL OR REMOVAL OF PARTNERS
Section 13.1 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 by
giving written notice to the other Partners (and it shall be deemed that the
General Partner has withdrawn pursuant to this Section 13.1(a)(i) if the General
Partner voluntarily withdraws as general partner of the Operating Partnership);
(ii) the General Partner transfers all of its General Partner Interest
pursuant to Section 11.2;
(iii) the General Partner is removed pursuant to Section 13.2;
(iv) the General Partner (A) makes a general assignment for the benefit of
creditors; (B) files a voluntary bankruptcy petition; (C) files a petition or
answer seeking for itself a reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief 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 13.1(a)(iv); or (E) seeks,
consents to or acquiesces in the appointment of a trustee, receiver or
liquidator of the General Partner or of all or any substantial part of its
properties;
(v) a final and non-appealable judgment is entered by a court with
appropriate jurisdiction ruling that the General Partner is bankrupt or
insolvent, or a final and non-appealable order for relief is entered by a court
with appropriate jurisdiction against the General Partner, in each case under
any federal or state bankruptcy or insolvency laws as now or hereafter in
effect; or
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(vi) 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.
If an Event of Withdrawal specified in Section 13.1(a)(iv), (v) or (vi)
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 13.1 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, Central
Standard Time, on July 31, 2004, 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 withdrawal is approved by the holders of at least two-thirds of the
Outstanding Common Units (excluding for purposes of such determination Common
Units owned by the General Partner and its Affiliates) 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 the limited partner of the Operating Partnership or cause the
Partnership or the Operating 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, Central Standard Time, on July
31, 2004, 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; (iii) at any time that the General Partner ceases
to be a General Partner pursuant to Section 13.1(a)(ii) or is removed pursuant
to Section 13.2; or (iv) notwithstanding clause (i) of this sentence, at any
time that the General Partner voluntarily withdraws by giving at least 90 days'
advance notice of its intention to withdraw to the Limited Partners, such
withdrawal to take effect on the date specified in the notice, if at the time
such notice is given one Person and its Affiliates (other than the General
Partner and its Affiliates) own beneficially or of record or control at least
50% of the Outstanding Common Units. The withdrawal of the General Partner from
the Partnership upon the occurrence of an Event of Withdrawal shall also
constitute the withdrawal of the General Partner as general partner of the
Operating Partnership. If the General Partner gives a notice of withdrawal
pursuant to Section 13.1(a)(i), holders of at least a majority of the
Outstanding Common Units (excluding for purposes of such determination Common
Units owned by the General Partner and its Affiliates) may, prior to the
effective date of such withdrawal, elect a successor General Partner. If, prior
to the effective date of the General Partner's withdrawal, a successor is
selected by the Limited Partners as provided herein, the Partnership, as the
limited partner of the Operating Partnership, shall cause such Person to become
the successor general partner of the Operating Partnership, as provided in the
Operating Partnership Agreement. 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 14.1. Any
successor General Partner elected in accordance with the terms of this Section
13.1 shall be subject to the provisions of Section 12.3.
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Section 13.2 Removal of the General Partner. The General Partner may be
removed if such removal is approved by Limited Partners holding at least
two-thirds of the Outstanding Common Units. Any such action by such Limited
Partners for removal of the General Partner must also provide for the election
of a successor General Partner by Limited Partners holding at least a majority
of the Outstanding Common Units. Such removal shall be effective immediately
following the admission of a successor General Partner pursuant to Article XII.
The removal of the General Partner shall also automatically constitute the
removal of the General Partner as general partner of the Operating Partnership,
as provided in the Operating Partnership Agreement. If a Person is elected as a
successor General Partner in accordance with the terms of this Section 13.2, the
Partnership, as the limited partner of the Operating Partnership, shall cause
such Person to become the successor general partner of the Operating
Partnership, as provided in the Operating Partnership Agreement. The right of
the Limited Partners holding Outstanding Common Units to remove the General
Partner shall not exist or be exercised unless the Partnership has received an
opinion opining as to the matters covered by a Withdrawal Opinion of Counsel.
Any successor General Partner elected in accordance with the terms of this
Section 13.2 shall be subject to the provisions of Section 12.3.
Section 13.3 Interest of Departing Partner and Successor General Partner.
(a) In the event of (i) withdrawal of the General Partner under
circumstances where such withdrawal does not violate this Agreement or (ii)
removal of the General Partner by the holders of Common Units under
circumstances where Cause does not exist, if a successor General Partner is
elected in accordance with the terms of Section 13.1 or 13.2, the Departing
Partner shall have the option exercisable prior to the effective date of the
departure of such Departing Partner to require its successor to purchase its
General Partner Interest and its partnership interest as the general partner in
the Operating Partnership (collectively, the "Combined Interest") in exchange
for an amount in cash equal to the fair market value of such Combined Interest,
such amount to be determined and payable as of the effective date of its
departure. If the General Partner is removed by the Limited Partners under
circumstances where Cause exists or if the General Partner withdraws under
circumstances where such withdrawal violates this Agreement or the Operating
Partnership Agreement, and if a successor General Partner is elected in
accordance with the terms of Section 13.1 or 13.2, such successor shall have the
option, exercisable prior to the effective date of the departure of such
Departing Partner, to purchase the Combined Interest of the Departing Partner
for such fair market value of such Combined Interest. In either event, the
Departing Partner shall be entitled to receive all reimbursements due such
Departing Partner pursuant to Section 6.4, including, without limitation, any
employee-related liabilities (including, without limitation, severance
liabilities), incurred in connection with the termination of any employees
employed by the General Partner for the benefit of the Partnership or the
Operating Partnership. Subject to Section 13.3(b), the Departing Partner shall,
as of the effective date of its departure, cease to share in any allocations or
distributions with respect to its General Partner Interest and Partnership
income, gain, loss, deduction and credit will be prorated and allocated as set
forth in Section 5.2(g).
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For purposes of this Section 13.3(a), the fair market value of the
Departing Partner's Combined Interest shall be determined by agreement between
the Departing Partner and its successor or, failing agreement within 30 days
after the effective date of such Departing Partner's departure, by an
independent investment banking firm or other independent expert selected by the
Departing Partner and its successor, which, in turn, may rely on other experts
and the determination of which shall be conclusive as to such matter. If such
parties cannot agree upon one independent investment banking firm or other
independent expert within 45 days after the effective date of such departure,
then the Departing Partner shall designate an independent investment banking
firm or other independent expert, the Departing Partner's successor shall
designate an independent investment banking firm or other independent expert,
and such firms or experts shall mutually select a third independent investment
banking firm or independent expert, which shall determine the fair market value
of the Combined Interest. In making its determination, such independent
investment banking firm or other independent expert shall consider the then
current trading price of Units on any National Securities Exchange on which
Units are then listed, the value of the Partnership's assets, the rights and
obligations of the General Partner and other factors it may deem relevant.
(b) If the Combined Interest is not purchased in the manner set forth in
Section 13.3(a), the Departing Partner shall become a Limited Partner and the
Combined Interest shall be converted into Common Units pursuant to a valuation
made by an investment banking firm or other independent expert selected pursuant
to Section 13.3(a), without reduction in such Partnership Interest (but subject
to proportionate dilution by reason of the admission of its successor). Any
successor General Partner shall indemnify the Departing Partner as to all debts
and liabilities of the Partnership arising on or after the date on which the
Departing Partner becomes a Limited Partner. For purposes of this Agreement,
conversion of the General Partner's Combined Interest to Common Units will be
characterized as if the General Partner contributed its Combined Interest to the
Partnership in exchange for the newly issued Common Units.
(c) If a successor General Partner is elected in accordance with the terms
of Section 13.1 or 13.2 and the option described in Section 13.3(a) is not
exercised by the party entitled to do so, the successor General Partner shall,
at the effective date of its admission to the Partnership, contribute to the
capital of the Partnership cash in an amount such that its Capital Account,
after giving effect to such contribution and any adjustments made to the Capital
Accounts of all Partners pursuant to Section 4.5(d)(i), shall be equal to that
percentage of the Capital Accounts of all Partners that is equal to its
Percentage Interest as the General Partner. In such event, such successor
General Partner shall, subject to the following sentence, be entitled to such
Percentage Interest of all Partnership allocations and distributions and any
other allocations and distributions to which the Departing Partner was entitled.
Section 13.4 Withdrawal of Limited Partners. No Limited Partner shall have
any right to withdraw from the Partnership; provided, however, that when a
transferee of a Limited Partner's Units becomes a Record Holder, such
transferring Limited Partner shall cease to be a Limited Partner with respect to
the Units so transferred.
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ARTICLE XIV
DISSOLUTION AND LIQUIDATION
Section 14.1 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 13.1 or 13.2, 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 14.2) its affairs should be wound up, upon:
(a) the expiration of its term as provided in Section 1.5;
(b) an Event of Withdrawal of the General Partner as provided in Section
13.1(a) (other than Section 13.1(a)(ii)), unless a successor is elected and an
Opinion of Counsel is received as provided in Section 13.1(b) or 13.2 and such
successor is admitted to the Partnership pursuant to Section 12.3;
(c) an election to dissolve the Partnership by the General Partner that is
approved by (i) the holders of at least a majority of the Outstanding Units
other than the Senior Units and (ii) the holders of at least a majority of the
Outstanding Senior Units (and all holders of Units hereby expressly consent that
such approval may be effected upon written consent of said applicable percentage
of the Outstanding Units);
(d) entry of a decree of judicial dissolution of the Partnership pursuant
to the provisions of the Delaware Act; or
(e) the sale of all or substantially all of the assets and properties of
the Partnership and the Operating Partnership taken as a whole.
Section 14.2 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 13.1(a)(i) or (iii) and the failure of the Partners to
select a successor to such Departing Partner pursuant to Section 13.1 or 13.2,
then within 90 days thereafter or (b) dissolution of the Partnership upon an
event constituting an Event of Withdrawal as defined in Section 13.1(a)(iv), (v)
or (vi), then within 180 days thereafter, a majority of the Outstanding Common
Units 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 a majority of the
Outstanding Common Units. Upon any such election by a majority of the
Outstanding Common Units, all Partners shall be bound thereby and shall be
deemed to have approved thereof. Unless such an election is made within the
applicable time period as set forth above, the Partnership shall conduct only
activities necessary to wind up its affairs. If such an election is so made,
then:
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(i) the reconstituted Partnership shall continue until the end of the term
set forth in Section 1.5 unless earlier dissolved in accordance with this
Article XIV;
(ii) if the successor General Partner is not the former General Partner,
then the interest of the former General Partner shall be treated thenceforth as
the interest of a Limited Partner and converted into Common Units in the manner
provided in Section 13.3(b); 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 General Partner pursuant to Section 1.4; provided, that the right of
a majority of Outstanding Common Units 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 any Limited Partner and (y) neither the Partnership, the
reconstituted limited partnership nor the Operating Partnership 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.
Section 14.3 Liquidation. Upon dissolution of the Partnership, unless the
Partnership is continued under an election to reconstitute and continue the
Partnership pursuant to Section 14.2, the General Partner, or in the event the
General Partner has been dissolved or removed, become bankrupt as set forth in
Section 13.1 or withdrawn from the Partnership, a liquidator or liquidating
committee approved by the holders of at least a majority of the Outstanding
Common Units, shall be the Liquidator. The Liquidator (if other than the General
Partner) shall be entitled to receive such compensation for its services as may
be approved by the holders of at least a majority of the Outstanding Common
Units. The Liquidator shall agree not to resign at any time without 15 days'
prior notice and (if other than the General Partner) may be removed at any time,
with or without cause, by notice of removal approved by a majority of the
Outstanding Units. 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 holders of at least a majority of the Outstanding Common Units.
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 XIV, 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 General Partner 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 6.3(b)) 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. The Liquidator shall liquidate the assets of the Partnership, and apply
and distribute the proceeds of such liquidation in the following order of
priority, unless otherwise required by mandatory provisions of applicable law:
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(a) the payment to creditors of the Partnership, including, without
limitation, Partners who are creditors, in the order of priority provided by
law; and the creation of a reserve of cash or other assets of the Partnership
for contingent liabilities in an amount, if any, determined by the Liquidator to
be appropriate for such purposes; and
(b) to all 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 this
clause) for the taxable year of the Partnership during which the liquidation of
the Partnership occurs (with the date of such 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).
Section 14.4 Distributions in Kind. Notwithstanding the provisions of
Section 14.3, which require the liquidation of the assets of the Partnership,
but subject to the order of priorities set forth therein, if prior to or upon
dissolution of the Partnership the Liquidator determines that an immediate sale
of part or all of the Partnership's assets would be impractical or would cause
undue loss to the Partners, the Liquidator may, in its absolute discretion,
defer for a reasonable time the liquidation of any assets except those necessary
to satisfy liabilities of the Partnership (including, without limitation, those
to Partners as creditors) and or distribute to the Partners or to specific
classes of Partners, in lieu of cash, as tenants in common and in accordance
with the provisions of Section 14.3, undivided interests in such Partnership
assets as the Liquidator deems not suitable for liquidation. Any such
distributions in kind shall be made only if, in the good faith judgment of the
Liquidator, such distributions in kind are in the best interest of the Limited
Partners, and shall be subject to such conditions relating to the disposition
and management of such properties as the Liquidator deems reasonable and
equitable and to any agreements governing the operation of such properties at
such time. The Liquidator shall determine the fair market value of any property
distributed in kind using such reasonable method of valuation as it may adopt.
Section 14.5 Cancellation of Certificate of Limited Partnership. Upon the
completion of the distribution of Partnership cash and property as provided in
Sections 14.3 and 14.4 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 cancelled and such other
actions as may be necessary to terminate the Partnership shall be taken.
Section 14.6 Reasonable Time for Winding Up. A reasonable time shall be
allowed for the orderly winding up of business and affairs of the Partnership
and the liquidation of its assets pursuant to Section 14.3 in order to minimize
any losses otherwise attendant upon such winding up, and the provisions of this
Agreement shall remain in effect between the Partners during the period of
liquidation.
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Section 14.7 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 the Limited Partners, or any portion thereof, it
being expressly understood that any such return shall be made solely from
Partnership assets.
Section 14.8 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.
Section 14.9 Waiver of Partition. To the maximum extent permitted by law,
each Partner hereby waives any right to partition of the Partnership property.
ARTICLE XV
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE
Section 15.1 Amendment to be Adopted Solely by General Partner. Each
Limited Partner agrees that the General Partner (pursuant to its powers of
attorney from the Limited Partners, Special Limited Partners and Assignees),
without the approval of any Limited Partner or Assignee, may amend any provision
of this Agreement, and 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 sole discretion of the General Partner, is
necessary or appropriate 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 that is necessary
or advisable in the opinion of the General Partner to ensure that neither the
Partnership nor the Operating Partnership will be treated as an association
taxable as a corporation or otherwise taxed as an entity for federal income tax
purposes;
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(d) a change (i) that, in the sole discretion of the General Partner, does
not adversely affect the Limited Partners in any material respect, (ii) that is
necessary or desirable 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, without limitation, the Delaware Act) or that is necessary
or desirable to facilitate the trading of the Units (including, without
limitation, the division of Outstanding Units into different classes to
facilitate uniformity of tax consequences within such classes of Units) or
comply with any rule, regulation, guideline or requirement of any National
Securities Exchange on which the Units are or will be listed for trading,
compliance with any of which the General Partner determines in its sole
discretion to be in the best interests of the Partnership and the Limited
Partners, (iii) that is necessary or desirable to implement certain tax-related
provisions of the Partnership Agreement, or (iv) that is required to effect the
intent of the provisions of this Agreement or is otherwise contemplated by this
Agreement;
(e) a change in the fiscal year or taxable year of the Partnership and any
changes that, in the sole discretion of the General Partner, are necessary or
appropriate as a result of a change in the fiscal year or taxable year of the
Partnership including, without limitation, if the General Partner 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 General Partner or its directors or officers 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, whether or not substantially similar to plan asset regulations
currently applied or proposed by the United States Department of Labor;
(g) subject to the terms of Section 4.3, an amendment that, in the sole
discretion of the General Partner, is necessary or desirable in connection with
the authorization for issuance of any class or series of Partnership Securities
pursuant to Section 4.3;
(h) any amendment expressly permitted in this Agreement to be made by the
General Partner acting alone;
(i) an amendment effected, necessitated or contemplated by a Merger
Agreement approved in accordance with Section 16.3;
(j) an amendment that, in the sole discretion of the General Partner, is
necessary or desirable 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 other than the Operating Partnership, in connection with the conduct by
the Partnership of activities permitted by the terms of Section 3.1;
(k) any amendment to clause (a) of the definition of "Arrearage Period"
that results in the extension of the Arrearage Period; or
(l) any other amendments substantially similar to the foregoing.
Section 15.2 Amendment Procedures. Except as provided in Sections 15.1,
15.3 and 15.13, 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 General Partner. A proposed amendment shall
be effective upon its approval by the holders of at least a majority of the
Outstanding Common Units, unless a greater or different percentage is required
under this Agreement. Each proposed amendment that requires the approval of the
holders of a specified percentage of Outstanding Common Units shall be set forth
in a writing that contains the text of the proposed amendment. If such an
amendment is proposed, the General Partner shall seek the written approval of
the requisite percentage of Outstanding Common Units or call a meeting of the
holders of Common Units to consider and vote on such proposed amendment. The
General Partner shall notify all Record Holders upon final adoption of any such
proposed amendments.
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Section 15.3 Amendment Requirements.
(a) Notwithstanding the provisions of Sections 15.1 and 15.2, no provision
of this Agreement that establishes a percentage of Outstanding Units required to
take any action shall be amended, altered, changed, repealed or rescinded in any
respect that would have the effect of reducing such voting requirement unless
such amendment is approved by the written consent or the affirmative vote of
holders of Outstanding Units whose aggregate Outstanding Units constitute not
less than the voting requirement sought to be reduced.
(b) Notwithstanding the provisions of Sections 15.1 and 15.2, no amendment
to this Agreement may (i) enlarge the obligations of any Limited Partner without
its consent, (ii) enlarge the obligations of the General Partner without its
consent, which may be given or withheld in its sole discretion, (iii) modify the
amounts distributable, reimbursable or otherwise payable to the General Partner
by the Partnership or the Operating Partnership, (iv) change Section 14.1(a) or
(c), (v) restrict in any way any action by or rights of the General Partner as
set forth in this Agreement or (vi) change the term of the Partnership or,
except as set forth in Section 14.1(c), give any Person the right to dissolve
the Partnership.
(c) Except as otherwise provided, and without limitation of the General
Partner's authority to adopt amendments to this Agreement as contemplated in
Section 15.1, any amendment that would have a material adverse effect on the
rights or preferences of any class of Outstanding Units in relation to other
classes of Units must be approved by the holders of not less than a majority of
the Outstanding Units of the class affected (excluding for purposes of such
determination Units owned by the General Partner and its Affiliates).
(d) Notwithstanding any other provision of this Agreement, except for
amendments pursuant to Section 6.3 or 15.1 and except as otherwise provided by
Section 16.3(b), no amendments shall become effective without the approval of
the holders of at least 95% of the Outstanding Common Units unless the
Partnership obtains an Opinion of Counsel to the effect that (a) such amendment
will not cause the Partnership or the Operating Partnership to be treated as an
association taxable as a corporation or otherwise taxable as an entity for
federal income tax purposes and (b) such amendment will not affect the limited
liability of any Limited Partner or any limited partner of the Operating
Partnership under applicable law.
(e) This Section 15.3 shall only be amended with the approval of the
holders of not less than 95% of the Outstanding Common Units.
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Section 15.4 Meetings. All acts of Limited Partners to be taken pursuant to
this Agreement shall be taken in the manner provided in this Article XV.
Meetings of the Limited Partners may be called by the General Partner or by
Limited Partners owning 20% or more of the Outstanding Units of the class or
classes for which a meeting is proposed. Limited Partners shall call a meeting
by delivering to the General Partner one or more requests in writing stating
that the signing Limited Partners wish to call a meeting and indicating the
general or specific purposes for which the meeting is to be called. Within 60
days after receipt of such a call from Limited Partners or within such greater
time as may be reasonably necessary for the Partnership to comply with any
statutes, rules, regulations, listing agreements or similar requirements
governing the holding of a meeting or the solicitation of proxies for use at
such a meeting, the General Partner shall send a notice of the meeting to the
Limited Partners either directly or indirectly through the Transfer Agent. A
meeting shall be held at a time and place determined by the General Partner on a
date not more than 60 days after the mailing of notice of the meeting. Limited
Partners shall not vote on matters that would cause the Limited Partners to be
deemed to be taking part in the management and control of the business and
affairs of the Partnership so as to jeopardize the Limited Partners' limited
liability under the Delaware Act or the law of any other state in which the
Partnership is qualified to do business.
Section 15.5 Notice of a Meeting. Notice of a meeting called pursuant to
Section 15.4 shall be given to the Record Holders in writing by mail or other
means of written communication in accordance with Section 18.1. The notice shall
be deemed to have been given at the time when deposited in the mail or sent by
other means of written communication.
Section 15.6 Record Date. For purposes of determining the Limited Partners
entitled to notice of or to vote at a meeting of the Limited Partners or to give
approvals without a meeting as provided in Section 15.11, the General Partner
may set a Record Date, which shall not be less than 10 nor more than 60 days
before (a) the date of the meeting (unless such requirement conflicts with any
rule, regulation, guideline or requirement of any National Securities Exchange
on which the Units are listed for trading, in which case the rule, regulation,
guideline or requirement of such exchange shall govern) or (b) in the event that
approvals are sought without a meeting, the date by which Limited Partners are
requested in writing by the General Partner to give such approvals.
Section 15.7 Adjournment. When a meeting is adjourned to another time or
place, notice need not be given of the adjourned meeting and a new Record Date
need not be fixed, if the time and place thereof are announced at the meeting at
which the adjournment is taken, unless such adjournment shall be for more than
45 days. At the adjourned meeting, the Partnership may transact any business
which might have been transacted at the original meeting. If the adjournment is
for more than 45 days or if a new Record Date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given in accordance with
this Article XV.
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Section 15.8 Waiver of Notice; Approval of Meeting; Approval of Minutes.
The transactions of any meeting of Limited Partners, however called and noticed,
and whenever held, shall be as valid as if had at a meeting duly held after
regular call and notice, if a quorum is present either in person or by proxy,
and if, either before or after the meeting, Limited Partners representing such
quorum who were present in person or by proxy and entitled to vote, sign a
written waiver of notice or an approval of the holding of the meeting or an
approval of the minutes thereof. All waivers and approvals shall be filed with
the Partnership records or made a part of the minutes of the meeting. Attendance
of a Limited Partner at a meeting shall constitute a waiver of notice of the
meeting, except when the Limited Partner does not approve, at the beginning of
the meeting, of the transaction of any business because the meeting is not
lawfully called or convened; and except that attendance at a meeting is not a
waiver of any right to disapprove the consideration of matters required to be
included in the notice of the meeting, but not so included, if the disapproval
is expressly made at the meeting.
Section 15.9 Quorum. The holders of two-thirds of the Outstanding Units of
the class or classes for which a meeting has been called represented in person
or by proxy shall constitute a quorum at a meeting of Limited Partners of such
class or classes unless any such action by the Limited Partners requires
approval by holders of a majority in interest of such Units, in which case the
quorum shall be a majority (excluding, in either case, if such are to be
excluded from the vote, Outstanding Units owned by the General Partner and its
Affiliates). At any meeting of the Limited Partners duly called and held in
accordance with this Agreement at which a quorum is present, the act of Limited
Partners holding Outstanding Units that in the aggregate represent a majority of
the Outstanding Units entitled to vote and be present in person or by proxy at
such meeting shall be deemed to constitute the act of all Limited Partners,
unless a greater or different percentage is required with respect to such action
under the provisions of this Agreement, in which case the act of the Limited
Partners holding Outstanding Units that in the aggregate represent at least such
greater or different percentage shall be required. The Limited Partners present
at a duly called or held meeting at which a quorum is present may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
Limited Partners to leave less than a quorum, if any action taken (other than
adjournment) is approved by the required percentage of Outstanding Units
specified in this Agreement. In the absence of a quorum, any meeting of Limited
Partners may be adjourned from time to time by the affirmative vote of a
majority of the Outstanding Units of the class or classes for which the meeting
was called represented either in person or by proxy, but no other business may
be transacted, except as provided in Section 15.7.
Section 15.10 Conduct of Meeting. The General Partner shall have full power
and authority concerning the manner of conducting any meeting of the Limited
Partners or solicitation of approvals in writing, including, without limitation,
the determination of Persons entitled to vote, the existence of a quorum, the
satisfaction of the requirements of Section 15.4, the conduct of voting, the
validity and effect of any proxies and the determination of any controversies,
votes or challenges arising in connection with or during the meeting or voting.
The General Partner shall designate a Person to serve as chairman of any meeting
and shall further designate a Person to take the minutes of any meeting. All
minutes shall be kept with the records of the Partnership maintained by the
General Partner. The General Partner may make such other regulations consistent
with applicable law and this Agreement as it may deem advisable concerning the
conduct of any meeting of the Limited Partners or solicitation of approvals in
writing, including, without limitation, regulations in regard to the appointment
of proxies, the appointment and duties of inspectors of votes and approvals, the
submission and examination of proxies and other evidence of the right to vote,
and the revocation of approvals in writing.
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Section 15.11 Action Without a Meeting. Any action that may be taken at a
meeting of the Limited Partners may be taken without a meeting if an approval in
writing setting forth the action so taken is signed by Limited Partners owning
not less than the minimum percentage of the Outstanding Units that would be
necessary to authorize or take such action at a meeting at which all the Limited
Partners entitled to vote thereon were present and voted. Prompt notice of the
taking of action without a meeting shall be given to the Limited Partners who
have not approved in writing. The General Partner may specify that any written
ballot submitted to Limited Partners for the purpose of taking any action
without a meeting shall be returned to the Partnership within the time period,
which shall be not less than 20 days, specified by the General Partner. If a
ballot returned to the Partnership does not vote all of the Units held by the
Limited Partner, the Partnership shall be deemed to have failed to receive a
ballot for the Units that were not voted. If approval of the taking of any
action by the Limited Partners is solicited by any Person other than by or on
behalf of the General Partner, the written approvals shall have no force and
effect unless and until (a) they are deposited with the Partnership in care of
the General Partner, (b) approvals sufficient to take the action proposed are
dated as of a date not more than 90 days prior to the date sufficient approvals
are deposited with the Partnership and (c) an Opinion of Counsel is delivered to
the General Partner to the effect that the exercise of such right and the action
proposed to be taken with respect to any particular matter (i) will not cause
the Limited Partners to be deemed to be taking part in the management and
control of the business and affairs of the Partnership so as to jeopardize the
Limited Partners' limited liability, (ii) will not jeopardize the status of the
Partnership as a partnership under applicable tax laws and regulations and (iii)
is otherwise permissible under the state statutes then governing the rights,
duties and liabilities of the Partnership and the Partners.
Section 15.12 Voting and Other Rights.
(a) Only those Record Holders of Units on the Record Date set pursuant to
Section 15.6 (and also subject to the limitations contained in the definition of
"Outstanding") shall be entitled to notice of, and to vote at, a meeting of
Limited Partners or to act with respect to matters as to which the holders of
the Outstanding Units have the right to vote or to act. All references in this
Agreement to votes of, or other acts that may be taken by, the Outstanding Units
shall be deemed to be references to the votes or acts of the Record Holders of
such Outstanding Units.
(b) With respect to Units that are held for a Person's account by another
Person (such as a broker, dealer, bank, trust company or clearing corporation,
or an agent of any of the foregoing), in whose name such Units are registered,
such broker, dealer or other agent shall, in exercising the voting rights in
respect of such Units on any matter, and unless the arrangement between such
Persons provides otherwise, vote such Units in favor of, and at the direction
of, the Person who is the beneficial owner, and the Partnership shall be
entitled to assume it is so acting without further inquiry. The provisions of
this Section 15.12(b) (as well as all other provisions of this Agreement) are
subject to the provisions of Section 10.4.
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(c) With respect to any vote or act that may be taken by the Record Holders
of the Outstanding Common Units as specified in this Agreement, each Outstanding
Common Unit shall be entitled to one (1) vote per that Outstanding Common Unit.
The Record Holders of the Outstanding Common Units shall always vote together as
a class upon any matter which they have the right to vote or act pursuant to
this Agreement.
Section 15.13 Voting Rights of Senior Units. Except as provided in Sections
4.3(c)(i), 9.7, 14.1, 15.3(c), 16.1(b), 17.1, this Section 15.13 or otherwise as
required by law, the Senior Units shall have no voting rights. So long as any
Senior Units remain outstanding, unless a greater percentage shall then be
required by law, the Partnership shall not, without the approval of the holders
of at least a majority of the Outstanding Senior Units voting separately as a
class, (i) amend the Partnership Agreement so as to affect adversely the
specified rights, preferences or privileges of the Senior Units, including any
amendment made in order to issue additional Senior Units other than as provided
for in this Agreement as in effect on the WNGL Closing Date, (ii) except as
permitted pursuant to Section 6.12 and Section 11.6, purchase, redeem or
otherwise acquire for value any Common Units or (iii) permit any of its
Subsidiaries to issue equity interests to any Person (other than the Partnership
and its Subsidiaries and an interest not to exceed a percentage equal to one
percent divided by ninety-nine percent to the General Partner). The holders of
at least a majority of the Outstanding Senior Units, voting separately as one
class, may waive compliance with any provision of this Agreement. In exercising
any voting rights provided for in this Agreement, each Outstanding Senior Unit
shall be entitled to one vote.
Section 15.14 Amendment of Arrearage Requirements. Without limitation of
the General Partner's authority to adopt amendments to this Agreement as
contemplated in Section 15.1 with respect to the interests of the Common Units:
(a) any amendment to the provisions of this Agreement related to the
Arrearage Period or the Arrearage that would reasonably be expected to have a
material adverse effect on the rights or preferences of the Outstanding Common
Units (other than the FCI Common Units) must be approved by the holders of not
less than a majority of the Outstanding Common Units (excluding for purposes of
such determination the FCI Common Units); and
(b) any amendment to the provisions of this Agreement related to the
Arrearage Period or the Arrearage that would reasonably be expected to have a
material adverse effect on the rights or preferences of the Outstanding FCI
Common Units must be approved by FCI or the holder of the last FCI Common Unit
as specified in Section 4.5(c).
ARTICLE XVI
MERGER
Section 16.1 Authority. (a) Subject to (b) below, 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, without limitation, a general partnership or limited 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 XVI;
95
(b) Without the approval of the holders of at least the majority of the
Outstanding Senior Units, the Partnership shall not, in a single transaction or
series of related transactions, consolidate with or merge with or into, or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its or the Operating Partnership's (which includes the sale by the
Partnership of its limited partnership interests in the Operating Partnership)
assets to, another Person unless: (A) either (1) the Partnership is the
Surviving Business Entity or (2) the Person (if other than the Partnership)
formed by such consolidation or into which the Partnership is merged or to which
the properties and assets of the Partnership or Operating Partnership are sold,
assigned, transferred, leased, conveyed or otherwise disposed of shall be an
entity organized under the laws of the United States or any State thereof or the
District of Columbia and shall expressly assume all of the obligations of the
Partnership under this Agreement, the WNGL Purchase Agreement and the WNGL
Registration Rights Agreement with respect to the Senior Units; and (B) if the
Partnership is not the Surviving Business Entity, the Senior Units shall be
converted into or exchanged for and shall become equity interests of such
Surviving Business entity, having in respect of such Surviving Business Entity
the same powers, preferences and relative, participating, optional or other
special rights and the qualifications, limitations or restrictions thereon, that
the Senior Units had immediately prior to such transactions.
Section 16.2 Procedure for Merger or Consolidation. Merger or consolidation
of the Partnership pursuant to this Article XVI requires the prior approval of
the General Partner. If the General Partner shall determine, in the exercise of
its sole discretion, to consent to the merger or consolidation, the General
Partner 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 partnership interests, rights, securities or obligations of the
Surviving Business Entity; and (i) if any general or limited partnership
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
partnership interests, rights, securities or obligations of the Surviving
Business Entity, the cash, property or general or limited partnership 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 partnership interests, securities or rights are to
receive in exchange for, or upon conversion of, their general or limited
partnership 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 partnership 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;
96
(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 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 16.4 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 fixed 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 General Partner.
Section 16.3 Approval by Holders of Common Units of Merger or Consolidation.
(a) The General Partner of the Partnership, upon its approval of the Merger
Agreement, shall direct that the Merger Agreement be submitted to a vote of the
Limited Partners holding Common Units whether at a meeting or by written
consent, in either case in accordance with the requirements of Article XV. A
copy or a summary of the Merger Agreement shall be included in or enclosed with
the notice of a meeting or the written consent.
(b) The Merger Agreement shall be approved upon receiving the affirmative
vote or consent of the holders of at least a majority of the Outstanding Common
Units unless the Merger Agreement contains any provision which, if contained in
an amendment to this Agreement, the provisions of this Agreement or the Delaware
Act would require the vote or consent of a greater percentage of the Outstanding
Common Units or of any class of Limited Partners, in which case such greater
percentage vote or consent shall be required for approval of the Merger
Agreement; provided that, in the case of a merger or consolidation in which the
surviving entity is a corporation or other entity intended to be treated as an
association taxable as a corporation or otherwise taxable as an entity for
federal income tax purposes, if in the opinion of the General Partner it is
necessary to effect, in contemplation of such merger or consolidation, an
amendment that would otherwise require a vote pursuant to Section 15.3(d), no
such vote pursuant to Section 15.3(d) shall be required unless such amendment by
its terms will be applicable to the Partnership in the event the merger or
consolidation is abandoned or unless such amendment will be applicable to the
Partnership during a period in excess of ten days prior to the merger or
consolidation.
(c) After such approval by vote or consent of the holders of the Common
Units, and at any time prior to the filing of the certificate of merger pursuant
to Section 16.4, the merger or consolidation may be abandoned pursuant to
provisions therefor, if any, set forth in the Merger Agreement.
97
Section 16.4 Certificate of Merger. Upon the required approval by the General
Partner 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.
Section 16.5 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 shall not
be deemed to result in a transfer or assignment of assets or liabilities from
one entity to another having occurred.
ARTICLE XVII
RIGHT TO ACQUIRE UNITS
Section 17.1 Right to Acquire Units.
(a) Notwithstanding any other provision of this Agreement, if at any time
not more than 20% of the total Units of any class then Outstanding are held by
Persons other than the General Partner and its Affiliates, the General Partner
shall, upon the approval of the holders of at least a majority of the
Outstanding Senior Units, have the right, which right it may assign and transfer
to the Partnership or any Affiliate of the General Partner, exercisable in its
sole discretion, to purchase all, but not less than all, of the Units of such
class then Outstanding held by Persons other than the General Partner and its
Affiliates, at the greater of (x) the Current Market Price as of the date three
days prior to the date that the notice described in Section 17.1(b) is mailed,
and (y) the highest cash price paid by the General Partner or any of its
Affiliates for any such Unit purchased during the 90-day period preceding the
date that the notice described in Section 17.1(b) is mailed.
98
(b) If the General Partner, any Affiliate of the General Partner or the
Partnership elects to exercise the right to purchase Units granted pursuant to
Section 17.1(a), the General Partner shall deliver to the Transfer Agent notice
of such election to purchase (the "Notice of Election to Purchase") and shall
cause the Transfer Agent to mail a copy of such Notice of Election to Purchase
to the Record Holders of Units (as of a Record Date selected by the General
Partner) at least 10, but not more than 60, days prior to the Purchase Date.
Such Notice of Election to Purchase shall also be published for a period of at
least three consecutive days in at least two daily newspapers of general
circulation printed in the English language and published in the Borough of
Manhattan, New York. The Notice of Election to Purchase shall specify the
Purchase Date and the price (determined in accordance with Section 17.1(a)) at
which Units will be purchased and state that the General Partner, its Affiliate
or the Partnership, as the case may be, elects to purchase such Units, upon
surrender of Certificates representing such Units in exchange for payment, at
such office or offices of the Transfer Agent as the Transfer Agent may specify,
or as may be required by any National Securities Exchange on which the Units are
listed or admitted to trading. Any such Notice of Election to Purchase mailed to
a Record Holder of Units at his address as reflected in the records of the
Transfer Agent shall be conclusively presumed to have been given whether or not
the owner receives such notice. On or prior to the Purchase Date, the General
Partner, its Affiliate or the Partnership, as the case may be, shall deposit
with the Transfer Agent cash in an amount sufficient to pay the aggregate
purchase price of all of the Units to be purchased in accordance with this
Section 17.1. If the Notice of Election to Purchase shall have been duly given
as aforesaid at least 10 days prior to the Purchase Date, and if on or prior to
the Purchase Date the deposit described in the preceding sentence has been made
for the benefit of the holders of Units subject to purchase as provided herein,
then from and after the Purchase Date, notwithstanding that any Certificate
shall not have been surrendered for purchase, all rights of the holders of such
Units (including, without limitation, any rights pursuant to Articles IV, V and
XIV) shall thereupon cease, except the right to receive the purchase price
(determined in accordance with Section 17.1(a)) for Units therefor, without
interest, upon surrender to the Transfer Agent of the Certificates representing
such Units, and such Units shall thereupon be deemed to be transferred to the
General Partner, its Affiliate or the Partnership, as the case may be, on the
record books of the Transfer Agent and the Partnership, and the General Partner
or any Affiliate of the General Partner, or the Partnership, as the case may be,
shall be deemed to be the owner of all such Units from and after the Purchase
Date and shall have all rights as the owner of such Units (including, without
limitation, all rights as owner of such Units pursuant to Articles IV, V and
XIV).
(c) At any time from and after the Purchase Date, a holder of an
Outstanding Unit subject to purchase as provided in this Section 17.1 may
surrender his Certificate, as the case may be, evidencing such Unit to the
Transfer Agent in exchange for payment of the amount described in Section
17.1(a), therefor, without interest thereon.
99
Section 17.2 Right to Acquire Senior Units.
(a) Notwithstanding any other provision of this Agreement, the Partnership
shall have the right, which it may assign to any of its Affiliates, exercisable
in its sole discretion, to purchase for cash, in whole or in part, at any time
or from time to time, Senior Units at the Senior Unit Redemption Price. The
right of the Partnership and its permitted assigns to purchase Outstanding
Senior Units at the Senior Unit Redemption Price shall not apply to Common Units
issued upon conversion of the Senior Units in accordance with Section 5.7;
provided, however, that the Partnership and its permitted assigns shall have the
right to exercise such right at any time prior to the date of conversion.
(b) If the Partnership or its permitted assigns exercises the right to
purchase Senior Units granted pursuant to Section 17.2(a), the Partnership shall
deliver or cause to be delivered to the holder or holders of Senior Units, a
Senior Unit Redemption Notice at least three, but not more than thirty (30)
Business Days prior to the Senior Unit Redemption Date.
(c) On or prior to the Senior Unit Redemption Date, the General Partner,
its Affiliate or the Partnership, as the case may be, shall deposit with the
Transfer Agent (or if all of the Outstanding Senior Units are held by one Holder
(including Affiliates of such Holder), pay to such Holder and its Affiliates)
cash in an amount sufficient to pay the aggregate Senior Unit Redemption Price
of all of the Senior Units acquired pursuant to this Section 17.2. On the Senior
Unit Redemption Date, each holder of Senior Units shall surrender the
Certificates representing the number of Senior Units set forth in the Senior
Unit Redemption Notice, in proper transfer form, in the manner and place
designated in such notice. On the Senior Unit Redemption Date, the Senior Unit
Redemption Price shall be payable in cash to the person whose name appears on
such Certificates as the owner thereof, and, if purchased by the Partnership and
not any of its Affiliates, each surrendered Certificate shall be canceled and
retired. In the event that less than all of the Senior Units represented by any
such Certificates are being acquired by the Partnership or any of its
Affiliates, new Certificates shall be issued representing the number of Senior
Units to remain Outstanding.
(d) On and after the Senior Unit Redemption Date, unless the Partnership or
any of its Affiliates defaults in the payment in full of the Senior Unit
Redemption Price, all distributions on the Senior Units to be purchased shall
cease, and all rights associated with the Senior Units to be purchased shall
terminate other than the right to receive the Senior Unit Redemption Price.
100
ARTICLE XVIII
GENERAL PROVISIONS
Section 18.1 Addresses and Notices. Any notice, demand, request, report or
proxy materials required or permitted to be given or made to a Partner or
Assignee under this Agreement shall be in writing and shall be deemed given or
made when delivered in person or when sent by first class United States mail or
by other means of written communication to the Partner or Assignee at the
address described below. Any notice, payment or report to be given or made to a
Partner or Assignee hereunder shall be deemed conclusively to have been given or
made, and the obligation to give such notice or report or to make such payment
shall be deemed conclusively to have been fully satisfied, upon sending of such
notice, payment or report to the Record Holder of such Unit at his address as
shown on the records of the Transfer Agent or as otherwise shown on the records
of the Partnership, regardless of any claim of any Person who may have an
interest in such Unit or the Partnership Interest of a General Partner by reason
of any assignment or otherwise. An affidavit or certificate of making of any
notice, payment or report in accordance with the provisions of this Section 18.1
executed by the General Partner, the Transfer Agent or the mailing organization
shall be prima facie evidence of the giving or making of such notice, payment or
report. If any notice, payment or report addressed to a Record Holder at the
address of such Record Holder appearing on the books and records of the Transfer
Agent or the Partnership is returned by the United States Post Office marked to
indicate that the United States Postal Service is unable to deliver it, such
notice, payment or report and any subsequent notices, payments and reports shall
be deemed to have been duly given or made without further mailing (until such
time as such Record Holder or another Person notifies the Transfer Agent or the
Partnership of a change in his address) if they are available for the Partner or
Assignee at the principal office of the Partnership for a period of one year
from the date of the giving or making of such notice, payment or report to the
other Partners and Assignees. Any notice to the Partnership shall be deemed
given if received by the General Partner at the principal office of the
Partnership designated pursuant to Section 1.3. The General Partner may rely and
shall be protected in relying on any notice or other document from a Partner,
Assignee or other Person if believed by it to be genuine.
Section 18.2 References. Except as specifically provided otherwise,
references to "Articles" and "Sections" are to Articles and Sections of this
Agreement.
Section 18.3 Pronouns and Plurals. Whenever the context may require, 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.
Section 18.4 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.
Section 18.5 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.
Section 18.6 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.
Section 18.7 Creditors. None of the provisions of this Agreement shall be
for the benefit of, or shall be enforceable by, any creditor of the Partnership.
101
Section 18.8 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 or any other covenant, duty, agreement or
condition.
Section 18.9 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 or, in the case of a
Person acquiring a Unit, upon accepting the certificate evidencing such Unit or
executing and delivering a Transfer Application as herein described,
independently of the signature of any other party.
Section 18.10 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.
Section 18.11 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.
102
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
GENERAL PARTNER:
FERRELLGAS, INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President and CFO
LIMITED PARTNERS:
All Limited Partners now and hereafter admitted
as limited partners of the Partnership, pursuant
to Powers of Attorney now and hereafter executed
in favor of, and granted and delivered to, the
General Partner.
By: FERRELLGAS, INC.
General Partner, as attorney-in-fact for
all Limited Partners pursuant to the
Powers of Attorney granted pursuant to
Section 1.4.
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President and CFO
EXHIBIT A
to the Fourth Amended and Restated Agreement of
Limited Partnership of
FERRELLGAS PARTNERS, L.P.
Certificate Evidencing Common Units
Representing Limited Partner Interests
FERRELLGAS PARTNERS, L.P.
No. _______ Common Units
FERRELLGAS, INC., a Delaware corporation, as the General Partner of
FERRELLGAS PARTNERS, L.P., a Delaware limited partnership (the "Partnership"),
hereby certifies that _____________________ (the "Holder") is the registered
owner of _____________ Common Units representing limited partner interests in
the Partnership (the "Common Units") transferable on the books of the
Partnership, in person or by duly authorized attorney, upon surrender of this
Certificate properly endorsed and accompanied by a properly executed application
for transfer of the Common Units represented by this Certificate. The rights,
preferences and limitations of the Common Units are set forth in, and this
Certificate and the Common Units represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Fourth Amended and
Restated Agreement of Limited Partnership of FERRELLGAS PARTNERS, L.P., as
amended, supplemented or restated from time to time (the "Partnership
Agreement"). Copies of the Partnership Agreement are on file at, and will be
furnished without charge on delivery of written request to the Partnership at,
the principal office of the Partnership located at Xxx Xxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000. Capitalized terms used herein but not defined shall have the
meaning given them in the Partnership Agreement.
The Holder, by accepting this Certificate, is deemed to have (i) requested
admission as, and agreed to become, a Limited Partner and to have agreed to
comply with and be bound by and to have executed the Partnership Agreement, (ii)
represented and warranted that the Holder has all right, power and authority
and, if an individual, the capacity necessary to enter into the Partnership
Agreement, (iii) granted the powers of attorney provided for in the Partnership
Agreement and (iv) made the waivers and given the consents and approvals
contained in the Partnership Agreement.
Page 1 of Exhibit A
This Certificate shall not be valid for any purpose unless it has been
countersigned and registered by the Transfer Agent and Registrar.
Dated:
--------------------------
Countersigned and Registered by: FERRELLGAS, INC.,
as General Partner
By:
-------------------------------- --------------------------------
Transfer Agent and Registrar President
By:
-------------------------------- --------------------------------
Authorized Signature Secretary
Page 2 of Exhibit A
[Reverse of Certificate]
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as follows according to applicable laws or
regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT-
TEN ENT - as tenants by the entireties . . . Custodian . . .
JT TEN - as joint tenants with right (Cust) (Minor)
of survivorship and not as under Uinform Gifts to Minors
in common Act . . . . . . . . . . . . . .
State
Additional abbreviations, though not in the above list, may also be used.
ASSIGNMENT OF COMMON UNITS
in
FERRELLGAS PARTNERS, L.P.
IMPORTANT NOTICE REGARDING INVESTOR RESPONSIBILITIES
DUE TO TAX SHELTER STATUS OF FERRELLGAS PARTNERS, L.P.
You have acquired an interest in Ferrellgas Partners, L.P., Xxx Xxxxxxx
Xxxxx, Xxxxxxx, Xxxxxxxx 00000, whose taxpayer identification number is
00-0000000. The Internal Revenue Service has issued Ferrellgas Partners, L.P.
the following tax shelter registration number 94201000010:
YOU MUST REPORT THIS REGISTRATION NUMBER TO THE INTERNAL REVENUE SERVICE IF
YOU CLAIM ANY DEDUCTION, LOSS, CREDIT, OR OTHER TAX BENEFIT OR REPORT ANY INCOME
BY REASON OF YOUR INVESTMENT IN FERRELLGAS PARTNERS, L.P.
You must report the registration number as well as the name and taxpayer
identification number of Ferrellgas Partners, L.P. on Form 8271. FORM 8271 MUST
BE ATTACHED TO THE RETURN ON WHICH YOU CLAIM THE DEDUCTION, LOSS, CREDIT, OR
OTHER TAX BENEFIT OR REPORT ANY INCOME BY REASON OF YOUR INVESTMENT IN
FERRELLGAS PARTNERS, L.P.
Page 3 of Exhibit A
If you transfer your interest in Ferrellgas Partners, L.P. to another
person, you are required by the Internal Revenue Service to keep a list
containing (a) that person's name, address and taxpayer identification number,
(b) the date on which you transferred the interest and (c) the name, address and
tax shelter registration number of Ferrellgas Partners, L.P. If you do not want
to keep such a list, you must (1) send the information specified above to the
Partnership, which will keep the list for this tax shelter, and (2) give a copy
of this notice to the person to whom you transfer your interest. Your failure to
comply with any of the above-described responsibilities could result in the
imposition of a penalty under Section 6707(b) or 6708(a) of the Internal Revenue
Code of 1986, as amended, unless such failure is shown to be due to reasonable
cause.
ISSUANCE OF A REGISTRATION NUMBER DOES NOT INDICATE THAT THIS
INVESTMENT OR THE CLAIMED TAX BENEFITS HAVE BEEN REVIEWED, EXAMINED, OR APPROVED
BY THE INTERNAL REVENUE SERVICE.
Page 4 of Exhibit A
FOR VALUE RECEIVED, ________________ hereby assigns, conveys, sells and
transfers unto ________________________________________________________________
------------------------------------- -------------------------------------
(Please print or typewrite (Please insert Social Security or
name and address of Assignee) other identifying number of Assignee)
Common Units representing limited partner interests evidenced by this
Certificate, subject to the Partnership Agreement, and does hereby irrevocably
constitute and appoint ________________ as its attorney-in-fact with full power
of substitution to transfer the same on the books of Ferrellgas Partners, L.P.
Date: NOTE: The signature to any endorsement hereon must
---------------- correspond with the name as written upon the face
of this Certificate in every particular, without
alteration, enlargement or change.
SIGNATURE(S) MUST BE GUARANTEED
BY A MEMBER FIRM OF THE NATIONAL ------------------------------------
ASSOCIATION OF SECURITIES (Signature)
DEALERS, INC. OR BY A COMMERCIAL
BANK OR TRUST COMPANY ------------------------------------
(Signature)
SIGNATURE(S) GUARANTEED
No transfer of the Common Units evidenced hereby will be registered on the
books of the Partnership, unless the Certificate evidencing the Common Units to
be transferred is surrendered for registration or transfer and an Application
for Transfer of Common Units has been executed by a transferee either (a) on the
form set forth below or (b) on a separate application that the Partnership will
furnish on request without charge. A transferor of the Common Units shall have
no duty to the transferee with respect to execution of the transfer application
in order for such transferee to obtain registration of the transfer of the
Common Units.
-------------------------------------------------------------------
Page 5 of Exhibit A
APPLICATION FOR TRANSFER OF COMMON UNITS
The undersigned ("Assignee") hereby applies for transfer to the name of the
Assignee of the Common Units evidenced hereby.
The Assignee (a) requests admission as a Substituted Limited Partner and
agrees to comply with and be bound by, and hereby executes, the Fourth Amended
and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P. (the
"Partnership"), as amended, supplemented or restated to the date hereof (the
"Partnership Agreement"), (b) represents and warrants that the Assignee has all
right, power and authority and, if an individual, the capacity necessary to
enter into the Partnership Agreement, (c) grants the powers of attorney provided
for in the Partnership Agreement and (d) makes the waivers and gives the
consents and approvals contained in the Partnership Agreement.
Capitalized terms not defined herein have the meanings assigned to such
terms in the Partnership Agreement.
Date:
----------------------------- -----------------------------------
Signature of Assignee
------------------------------------ -----------------------------------
Social Security or other Name and Address of Assignee
identifying number of Assignee
------------------------------------
Purchase Price
including commissions, if any
Type of Entity (check one)
_____ Individual _____ Partnership _____ Corporation
_____ Trust _____ Other (specify) _________________
Nationality (Check One):
_____ U.S. Citizen, Resident or Domestic Entity
_____ Foreign Corporation, or _____ Non-resident alien
If the U.S. Citizen, Resident or Domestic Entity box is checked, the
following certification must be completed.
Page 6 of Exhibit A
Under Section 1445(e) of the Internal Revenue Code of 1986, as amended (the
"Code"), the Partnership must withhold tax with respect to certain transfers of
property if a holder of an interest in the Partnership is a foreign person. To
inform the Partnership that no withholding is required with respect to the
undersigned interest holder's interest in it, the undersigned hereby certifies
the following (or, if applicable, certifies the following on behalf of the
interest holder).
Complete Either A or B:
A. Individual Interest Holder
1. I am not a non-resident alien for purposes of U.S. income taxation.
2. My U.S. taxpayer identifying number (Social Security Number) is
_______________________________________________________________.
3. My home address is
_______________________________________________________________.
B. Partnership, Corporate or Other Interest-Holder
1. ______________________________________ is not a
(Name of Interest-Holder)
foreign corporation, foreign partnership, foreign trust or foreign
estate (as those terms are defined in the Code and Treasury
Regulations).
2. The interest-holder's U.S. employer identification number is
_______________________________________________________________.
3. The interest-holder's office address and place of incorporation
(if applicable) is .
_______________________________________________________________.
The interest-holder agrees to notify the Partnership within 60 days of the
date the interest-holder becomes a foreign person.
The interest-holder understands that this certificate may be disclosed to
the Internal Revenue Service by the Partnership and that any false statement
contained herein could be punishable by fine, imprisonment or both.
Page 7 of Exhibit A
Under penalties of perjury, I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct and
complete and, if applicable, I further declare that I have authority to sign
this document on behalf of
_______________________________________________________________
(Name of Interest-Holder)
_______________________________________________________________
Signature and Date
_______________________________________________________________
Title (if applicable)
Note: If the Assignee is a broker, dealer, bank, trust company, clearing
corporation, other nominee holder or an agent of any of the foregoing, and is
holding for the account of any other person, this application should be
completed by an officer thereof or, in the case of a broker or dealer, by a
registered representative who is a member of a registered national securities
exchange or a member of the National Association of Securities Dealers, Inc.,
or, in the case of any other nominee holder, a person performing a similar
function. If the Assignee is a broker, dealer, bank trust company, clearing
corporation, other nominee owner or an agent of any of the foregoing, the above
certification as to any person for whom the Assignee will hold the Common Units
shall be made to the best of the Assignee's knowledge.
Page 8 of Exhibit A
EXHIBIT B
to the Agreement of
Limited Partnership of
FERRELLGAS PARTNERS, L.P.
Certificate Evidencing Senior Units
Representing Limited Partner Interests
FERRELLGAS PARTNERS, L.P.
No.________ Senior Units
FERRELLGAS, INC., a Delaware corporation, as the General Partner of
FERRELLGAS PARTNERS, L.P., a Delaware limited partnership (the "Partnership"),
hereby certifies that ____________________ (the "Holder") is the registered
owner of _____ Senior Units representing limited partner interests in the
Partnership (the "Senior Units") transferable on the books of the Partnership,
in person or by duly authorized attorney, upon surrender of this Certificate
properly endorsed and accompanied by a properly executed application for
transfer of the Senior Units represented by this Certificate. The rights,
preferences and limitations of the Senior Units are set forth in, and this
Certificate and the Senior Units represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Fourth Amended and
Restated Agreement of Limited Partnership of FERRELLGAS PARTNERS, L.P., as
amended, supplemented or restated from time to time (the "Partnership
Agreement"). Copies of the Partnership Agreement are on file at, and will be
furnished without charge on delivery of written request to the Partnership at,
the principal office of the Partnership located at Xxx Xxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000. Capitalized terms used herein but not defined shall have the
meaning given them in the Partnership Agreement.
The Holder, by accepting this Certificate, is deemed to have (i) requested
admission as, and agreed to become, a Limited Partner and to have agreed to
comply with and be bound by and to have executed the Partnership Agreement, (ii)
represented and warranted that the Holder has all right, power and authority
and, if an individual, the capacity necessary to enter into the Partnership
Agreement, (iii) granted the powers of attorney provided for in the Partnership
Agreement and (iv) made the waivers and given the consents and approvals
contained in the Partnership Agreement.
Dated:
----------------------------
FERRELLGAS, INC.,
as General Partner
By:
------------------------------------------------
President
By:
------------------------------------------------
Secretary
Page 1 of Exhibit B
[Reverse of Certificate]
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this Certificate, shall be construed as follows according to applicable laws
or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT-
TEN ENT - as tenants by the entireties . . . Custodian . . .
JT TEN - as joint tenants with right (Cust) (Minor)
of survivorship and not as under Uinform Gifts to Minors
in common Act . . . . . . . . . . . . . .
State
Additional abbreviations, though not in the above list, may also be used.
ASSIGNMENT OF SENIOR UNITS
in
FERRELLGAS PARTNERS, L.P.
IMPORTANT NOTICE REGARDING INVESTOR RESPONSIBILITIES
DUE TO TAX SHELTER STATUS OF FERRELLGAS PARTNERS, L.P.
You have acquired an interest in Ferrellgas Partners, L.P., Xxx Xxxxxxx
Xxxxx, Xxxxxxx, Xxxxxxxx 00000, whose taxpayer identification number is
00-0000000. The Internal Revenue Service has issued Ferrellgas Partners, L.P.
the following tax shelter registration number 94201000010:
YOU MUST REPORT THIS REGISTRATION NUMBER TO THE INTERNAL REVENUE SERVICE IF
YOU CLAIM ANY DEDUCTION, LOSS, CREDIT, OR OTHER TAX BENEFIT OR REPORT ANY INCOME
BY REASON OF YOUR INVESTMENT IN FERRELLGAS PARTNERS, L.P.
You must report the registration number as well as the name and taxpayer
identification number of Ferrellgas Partners, L.P. on Form 8271. FORM 8271 MUST
BE ATTACHED TO THE RETURN ON WHICH YOU CLAIM THE DEDUCTION, LOSS, CREDIT, OR
OTHER TAX BENEFIT OR REPORT ANY INCOME BY REASON OF YOUR INVESTMENT IN
FERRELLGAS PARTNERS, L.P.
If you transfer your interest in Ferrellgas Partners, L.P. to another
person, you are required by the Internal Revenue Service to keep a list
containing (a) that person's name, address and taxpayer identification number,
(b) the date on which you transferred the interest and (c) the name, address and
tax shelter registration number of Ferrellgas Partners, L.P. If you do not want
Page 2 of Exhibit B
to keep such a list, you must (1) send the information specified above to the
Partnership, which will keep the list for this tax shelter, and (2) give a copy
of this notice to the person to whom you transfer your interest. Your failure to
comply with any of the above-described responsibilities could result in the
imposition of a penalty under Section 6707(b) or 6708(a) of the Internal Revenue
Code of 1986, as amended, unless such failure is shown to be due to reasonable
cause.
ISSUANCE OF A REGISTRATION NUMBER DOES NOT INDICATE THAT THIS
INVESTMENT OR THE CLAIMED TAX BENEFITS HAVE BEEN REVIEWED, EXAMINED, OR APPROVED
BY THE INTERNAL REVENUE SERVICE.
Page 3 of Exhibit B
FOR VALUE RECEIVED, ________________ hereby assigns, conveys, sells and
transfers unto _________________________________________________________________
__________________________________ ________________________________________
(Please print or typewrite (Please insert Social Security
name and address of Assignee) or other identifying number of Assignee)
____________________________________ Senior Units representing limited
partner interests evidenced by this Certificate, subject to the Partnership
Agreement, and does hereby irrevocably constitute and appoint ____________ as
its attorney-in-fact with full power of substitution to transfer the same on the
books of Ferrellgas Partners, L.P.
Date: NOTE: The signature to any endorsement hereon
------------------------------ must correspond with the name as written upon
the face of this Certificate in every
particular, without alteration, enlargement
or change.
----------------------------------------------
(Signature)
No transfer of the Senior Units evidenced hereby will be registered on the
books of the Partnership, unless the Certificate evidencing the Senior Units to
be transferred is surrendered for registration or transfer and an Application
for Transfer of Senior Units has been executed by a transferee either (a) on the
form set forth below or (b) on a separate application that the Partnership will
furnish on request without charge. A transferor of the Senior Units shall have
no duty to the transferee with respect to execution of the transfer application
in order for such transferee to obtain registration of the transfer of the
Senior Units.
Page 4 of Exhibit B
APPLICATION FOR TRANSFER OF SENIOR UNITS
The undersigned ("Assignee") hereby applies for transfer to the name of the
Assignee of the Senior Units evidenced hereby.
The Assignee (a) requests admission as a Substituted Limited Partner and
agrees to comply with and be bound by, and hereby executes, the Fourth Amended
and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P. (the
"Partnership"), as amended, supplemented or restated to the date hereof (the
"Partnership Agreement"), (b) represents and warrants that the Assignee has all
right, power and authority and, if an individual, the capacity necessary to
enter into the Partnership Agreement, (c) grants the powers of attorney provided
for in the Partnership Agreement and (d) makes the waivers and gives the
consents and approvals contained in the Partnership Agreement.
Capitalized terms not defined herein have the meanings assigned to such
terms in the Partnership Agreement.
Date:
------------------ ------------------------------------
Signature of Assignee
--------------------------------------- ------------------------------------
Social Security or other identifying Name and Address of Assignee
number of Assignee
---------------------------------------
Purchase Price
including commissions, if any
Type of Entity (check one)
_____ Individual _____ Partnership _____ Corporation
_____ Trust _____ Other (specify) _______________
Nationality (Check One):
_____ U.S. Citizen, Resident or Domestic Entity
_____ Foreign Corporation, or _____ Non-resident alien
Page 5 of Exhibit B
If the U.S. Citizen, Resident or Domestic Entity box is checked, the
following certification must be completed.
Under Section 1445(e) of the Internal Revenue Code of 1986, as amended (the
"Code"), the Partnership must withhold tax with respect to certain transfers of
property if a holder of an interest in the Partnership is a foreign person. To
inform the Partnership that no withholding is required with respect to the
undersigned interest holder's interest in it, the undersigned hereby certifies
the following (or, if applicable, certifies the following on behalf of the
interest holder).
Complete Either A or B:
A. Individual Interest Holder
1. I am not a non-resident alien for purposes of U.S. income taxation.
2. My U.S. taxpayer identifying number (Social Security Number) is
_______________________________________________________________.
3. My home address is
_______________________________________________________________.
B. Partnership, Corporate or Other Interest-Holder
1. ____________________________________________________ is not a
(Name of Interest-Holder)
foreign corporation, foreign partnership, foreign
trust or foreign estate (as those terms are defined
in the Code and Treasury Regulations).
2. The interest-holder's U.S. employer identification number is
_______________________________________________________________.
3. The interest-holder's office address and place of incorporation
(if applicable) is
_______________________________________________________________.
The interest-holder agrees to notify the Partnership within 60 days of the
date the interest-holder becomes a foreign person.
The interest-holder understands that this certificate may be disclosed to
the Internal Revenue Service by the Partnership and that any false statement
contained herein could be punishable by fine, imprisonment or both.
Page 6 of Exhibit B
Under penalties of perjury, I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct and
complete and, if applicable, I further declare that I have authority to sign
this document on behalf of
_______________________________________________________________
(Name of Interest-Holder)
_______________________________________________________________
Signature and Date
_______________________________________________________________
Title (if applicable)
Note: If the Assignee is a broker, dealer, bank, trust company, clearing
corporation, other nominee holder or an agent of any of the foregoing, and is
holding for the account of any other person, this application should be
completed by an officer thereof or, in the case of a broker or dealer, by a
registered representative who is a member of a registered national securities
exchange or a member of the National Association of Securities Dealers, Inc.,
or, in the case of any other nominee holder, a person performing a similar
function. If the Assignee is a broker, dealer, bank trust company, clearing
corporation, other nominee owner or an agent of any of the foregoing, the above
certification as to any person for whom the Assignee will hold the Senior Units
shall be made to the best of the Assignee's knowledge.
Page 7 of Exhibit B
Form of Election to Convert
To Ferrellgas Partners, L.P.
The undersigned owner of the Senior Units evidenced by this Certificate
hereby exercises the option to convert all such Senior Units, or the number of
Senior Units below designated, into Common Units of Ferrellgas Partners, L.P. in
accordance with the terms of the Partnership Agreement referred to in this
Certificate, and directs that the Common Units issuable and deliverable upon
conversion, together with any check in payment for fractional shares, be issued
with any check in payment for fractional shares, be issued in the name of and
delivered to the undersigned registered Holder hereof, unless a different name
has been indicated in the assignment below. If Common Units are to be issued in
the name of person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto. Any amount required to be paid by
the undersigned on account of accumulated and undistributed distributions
accompanies this Certificate.
Dated:
Number of Senior Units to be converted:
----------------------
------------------------------------
Signature (for conversion only)
If Common Units are to be issued and
registered otherwise than to the
registered Holder named above,
please print or typewrite name and
address, including zip code, and
social security or other taxpayer
identification number.
------------------------------------
Page 8 of Exhinit B
Table of Contents
Page
ARTICLE I ORGANIZATIONAL MATTERS.................................3
Section 1.1 Formation and Continuation..........................3
Section 1.2 Name................................................3
Section 1.3 Registered Office; Principal Office.................3
Section 1.4 Power of Attorney...................................4
Section 1.5 Term................................................5
Section 1.6 Possible Restrictions on Transfer...................5
ARTICLE II DEFINITIONS............................................6
ARTICLE III PURPOSE................................................27
Section 3.1 Purpose and Business................................27
Section 3.2 Powers..............................................28
ARTICLE IV CAPITAL CONTRIBUTIONS..................................28
Section 4.1 Initial Contributions...............................28
Section 4.2 Contributions by the General Partner and the Initial
Limited Partners; Contributions on the WNGL Closing
Date and issuance of General Partner Units..........28
Section 4.3 Issuances of Additional Units and Other Securities..29
Section 4.4 Limited Preemptive Rights...........................31
Section 4.5 Capital Accounts....................................31
Section 4.6 Interest............................................34
Section 4.7 No Withdrawal.......................................34
Section 4.8 Loans from Partners.................................34
Section 4.9 No Fractional Units.................................34
Section 4.10 Splits and Combinations.............................34
ARTICLE V ALLOCATIONS AND DISTRIBUTIONS..........................35
Section 5.1 Allocations for Capital Account Purposes............35
Section 5.2 Allocations for Tax Purposes........................44
Section 5.3 Requirement and Characterization of Distributions...46
Section 5.4 Distributions of Cash from Operations and Additional
Senior Units........................................46
Section 5.5 Distributions of Cash from Interim Capital
Transactions........................................51
i
Section 5.6 Adjustment of Senior Unit Liquidation Preference,
Senior Unit Distribution, Minimum Quarterly
Distribution and Target Distribution Levels.........51
Section 5.7 Special Provisions Relating to the Senior Units.....52
Section 5.8 Special Provisions Relating to the Special Limited
Partners............................................55
Section 5.9 Special Provision Relating to FCI Common Units......55
ARTICLE VI MANAGEMENT AND OPERATION OF BUSINESS...................55
Section 6.1 Management..........................................55
Section 6.2 Certificate of Limited Partnership..................57
Section 6.3 Restrictions on General Partner's Authority.........58
Section 6.4 Reimbursement of the General Partner................58
Section 6.5 Outside Activities..................................59
Section 6.6 Loans to and from the General Partner; Contracts
with Affiliates.....................................61
Section 6.7 Indemnification.....................................62
Section 6.8 Liability of Indemnitees............................64
Section 6.9 Resolution of Conflicts of Interest.................64
Section 6.10 Other Matters Concerning the General Partner........66
Section 6.11 Title to Partnership Assets.........................66
Section 6.12 Purchase or Sale of Units...........................67
Section 6.13 Registration Rights of Ferrellgas and its
Affiliates..........................................67
Section 6.14 Reliance by Third Parties...........................69
ARTICLE VII RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS.............70
Section 7.1 Limitation of Liability.............................70
Section 7.2 Management of Business..............................70
Section 7.3 Outside Activities..................................70
Section 7.4 Return of Capital...................................70
Section 7.5 Rights of Limited Partners Relating to the
Partnership.........................................71
ARTICLE VIII BOOKS, RECORDS, ACCOUNTING AND REPORTS.................72
Section 8.1 Records and Accounting..............................72
Section 8.2 Fiscal Year.........................................72
Section 8.3 Reports.............................................72
ii
ARTICLE IX TAX MATTERS............................................72
Section 9.1 Preparation of Tax Returns..........................72
Section 9.2 Tax Elections.......................................73
Section 9.3 Tax Controversies...................................73
Section 9.4 Organizational Expenses.............................73
Section 9.5 Withholding.........................................73
Section 9.6 Entity-Level Taxation...............................74
Section 9.7 Entity-Level Arrearage Collections..................74
Section 9.8 Opinions of Counsel.................................75
ARTICLE X CERTIFICATES...........................................75
Section 10.1 Certificates........................................75
Section 10.2 Registration, Registration of Transfer and
Exchange............................................75
Section 10.3 Mutilated, Destroyed, Lost or Stolen Certificates...76
Section 10.4 Record Holder.......................................77
ARTICLE XI TRANSFER OF INTERESTS..................................77
Section 11.1 Transfer............................................77
Section 11.2 Transfer of the General Partner Interest............78
Section 11.3 Transfer of Units (other than General
Partner Units)......................................78
Section 11.4 Restrictions on Transfers...........................79
Section 11.5 Citizenship Certificates; Non-citizen Assignees.....79
Section 11.6 Redemption of Interests.............................80
Section 11.7 Transfer of IDRs....................................81
ARTICLE XII ADMISSION OF PARTNERS..................................81
Section 12.1 Admission of Initial Limited Partners...............81
Section 12.2 Admission of Substituted Limited Partners...........81
Section 12.3 Admission of Successor General Partner..............82
Section 12.4 Admission of Additional Limited Partners............82
Section 12.5 Amendment of Agreement and Certificate of Limited
Partnership.........................................83
iii
ARTICLE XIII WITHDRAWAL OR REMOVAL OF PARTNERS......................83
Section 13.1 Withdrawal of the General Partner...................83
Section 13.2 Removal of the General Partner......................85
Section 13.3 Interest of Departing Partner and Successor
General Partner.....................................85
Section 13.4 Withdrawal of Limited Partners......................87
ARTICLE XIV DISSOLUTION AND LIQUIDATION............................87
Section 14.1 Dissolution.........................................87
Section 14.2 Continuation of the Business of the Partnership
after Dissolution...................................87
Section 14.3 Liquidation.........................................88
Section 14.4 Distributions in Kind...............................89
Section 14.5 Cancellation of Certificate of Limited Partnership..89
Section 14.6 Reasonable Time for Winding Up......................90
Section 14.7 Return of Capital Contributions.....................90
Section 14.8 Capital Account Restoration.........................90
Section 14.9 Waiver of Partition.................................90
ARTICLE XV AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS;
RECORD DATE............................................90
Section 15.1 Amendment to be Adopted Solely by General Partner...90
Section 15.2 Amendment Procedures................................92
Section 15.3 Amendment Requirements..............................92
Section 15.4 Meetings............................................93
Section 15.5 Notice of a Meeting.................................93
Section 15.6 Record Date.........................................93
Section 15.7 Adjournment.........................................94
Section 15.8 Waiver of Notice; Approval of Meeting; Approval
of Minutes..........................................94
Section 15.9 Quorum..............................................94
Section 15.10 Conduct of Meeting..................................95
Section 15.11 Action Without a Meeting............................95
Section 15.12 Voting and Other Rights.............................95
Section 15.13 Voting Rights of Senior Units.......................96
Section 15.14 Amendment of Arrearage Requirements.................96
iv
ARTICLE XVI MERGER.................................................97
Section 16.1 Authority...........................................97
Section 16.2 Procedure for Merger or Consolidation...............97
Section 16.3 Approval by Holders of Common Units of Merger
or Consolidation....................................98
Section 16.4 Certificate of Merger...............................99
Section 16.5 Effect of Merger....................................99
ARTICLE XVII RIGHT TO ACQUIRE UNITS.................................100
Section 17.1 Right to Acquire Units..............................100
Section 17.2 Right to Acquire Senior Units.......................101
ARTICLE XVIII GENERAL PROVISIONS.....................................102
Section 18.1 Addresses and Notices...............................102
Section 18.2 References..........................................102
Section 18.3 Pronouns and Plurals................................102
Section 18.4 Further Action......................................103
Section 18.5 Binding Effect......................................103
Section 18.6 Integration.........................................103
Section 18.7 Creditors...........................................103
Section 18.8 Waiver..............................................103
Section 18.9 Counterparts........................................103
Section 18.10 Applicable Law......................................103
Section 18.11 Invalidity of Provisions............................103
EXHIBIT A - Certificate Evidencing Common Units
EXHIBIT B - Certificate Evidencing Senior Units
v
