EXHIBIT 99.1
REORGANIZATION AGREEMENT
THIS REORGANIZATION AGREEMENT, dated as of May 30, 2002, is
entered into by and among Xxxxxx X.X., a Delaware limited partnership (the
"MLP"), Valero Logistics Operations, L.P., a Delaware limited partnership (the
"OLP"), Riverwalk Logistics, L.P., a Delaware limited partnership ("Riverwalk"),
and Xxxxxx XX, Inc., a Delaware corporation ("GP Inc.").
RECITALS
WHEREAS, Riverwalk owns a 1% general partner interest in the
MLP and a 1.0101% general partner interest in the OLP;
WHEREAS, the parties to this Agreement have determined that it
would be in their best interests to reorganize the equity ownership structure of
the OLP such that the OLP becomes a 100%-owned subsidiary of the MLP;
WHEREAS, in order to accomplish the objectives and purposes in
the preceding recital, prior to the date hereof, the MLP has formed GP Inc. and
contributed $1,000 in exchange for all of the capital stock in GP Inc., and GP
Inc. constitutes a 100%-owned subsidiary of the MLP;
NOW, THEREFORE, in consideration of their mutual undertakings
and agreements hereunder, the parties to this Agreement undertake and agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. In addition to the capitalized terms defined
in the opening paragraph of this Agreement, the following capitalized terms
shall have the meanings given below.
"Agreement" means this Reorganization Agreement.
"Delaware Act" means the Delaware Revised Uniform
Limited Partnership Act.
"MLP Partnership Agreement" means the Second Amended
and Restated Agreement of Limited Partnership of Xxxxxx X.X. dated as of April
16, 2001, as amended by the First Amendment to Second Amended and Restated
Agreement of Limited Partnership dated as of December 31, 2001, as the same may
be further amended or restated pursuant to the terms hereof.
"OLP Excess Liabilities" means any liability of GP
Inc., whether as general partner of OLP or pursuant to the assumption by GP Inc.
of liabilities and obligations of
OLP pursuant to Section 3.2, for liabilities of OLP existing at the time of the
contribution and assignment of the Revised OLP General Partner Interest to GP
Inc. pursuant to Section 2.1, but only to the extent that Riverwalk's share of
such liabilities immediately prior to such contribution exceeds Riverwalk's
federal income tax basis in its partnership interest in OLP.
"OLP Partnership Agreement" means the Second Amended
and Restated Agreement of Limited Partnership of Valero Logistics Operations,
L.P. dated as of April 16, 2001, as amended by the First Amendment to Second
Amended and Restated Agreement of Limited Partnership effective as of April 16,
2001, as further amended by the Second Amendment to Second Amended and Restated
Agreement of Limited Partnership dated as of January 7, 2002, as the same may be
further amended or restated pursuant to the terms hereof.
"Revised OLP General Partner Interest" has the
meaning set forth in Section 2.1.
"Revised OLP Limited Partner Interest" has the
meaning set forth in Section 2.2.
ARTICLE II
CONTRIBUTIONS AND ASSIGNMENTS
2.1 Contribution by the MLP to GP Inc. The MLP hereby grants,
contributes, transfers and conveys to GP Inc., its successors and assigns, all
right, title and interest in and to a 0.01% limited partner interest in the OLP
(the "Revised OLP General Partner Interest") and GP Inc. hereby accepts the
Revised OLP General Partner Interest as a contribution to the capital of GP Inc.
2.2 Recharacterization of Interests. Effective
contemporaneously with the contribution of the Revised OLP General Partner
Interest pursuant to Section 2.1 hereof, (i) the Revised OLP General Partner
Interest shall be recharacterized as, and shall constitute, a general partner
interest and (ii) the 1.0101% general partner interest held by Riverwalk in the
OLP (the "Revised OLP Limited Partner Interest") shall be recharacterized as,
and shall constitute, a limited partner interest. The OLP hereby acknowledges
receipt of the opinion of counsel required in Section 4.2 of the OLP Partnership
Agreement.
2.3 Contribution by Riverwalk to the MLP. Effective
contemporaneously with the contribution of the Revised OLP General Partner
Interest pursuant to Section 2.1 hereof and the recharacterization of interests
pursuant to Section 2.2 hereof, Riverwalk hereby grants, contributes, transfers,
assigns and conveys to the MLP, its successors and assigns, all right, title and
interest of Riverwalk in and to the Revised OLP Limited Partner Interest, and
the MLP hereby accepts the Revised OLP Limited Partner Interest, as a
contribution to the capital of the MLP in exchange for the increase in the
general partner interest of Riverwalk in the MLP as set forth in Section 5.2
hereof.
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ARTICLE III
SUCCESSION OF GENERAL PARTNER OF THE OLP
3.1 Withdrawal of Riverwalk as General Partner of the OLP.
Effective contemporaneously with the contribution of the Revised OLP General
Partner Interest pursuant to Section 2.1 hereof, the recharacterization of
interests pursuant to Section 2.2 hereof and pursuant to Section 10.4 of the OLP
Partnership Agreement, Riverwalk hereby ceases to be and withdraws as general
partner of the OLP and proposes GP Inc. to act and serve as sole general partner
of the OLP. The OLP acknowledges receipt of the opinion of counsel required in
Section 11.1(b) of the OLP Partnership Agreement.
3.2 GP Inc. as Successor General Partner of the OLP. Effective
contemporaneously with (i) GP Inc.'s acceptance of the contributions to GP Inc.
of the Revised OLP General Partner Interest pursuant to Section 2.1 and the
recharacterization of such interest pursuant to Section 2.2 and (ii) the
cessation and withdrawal of Riverwalk as general partner of the OLP, GP Inc.
accepts and agrees to duly and timely pay, perform and discharge the rights,
duties and obligations of the general partner of the OLP and all of the terms
and conditions of the OLP Partnership Agreement in accordance with Section 10.4
of the OLP Partnership Agreement, and GP Inc. agrees to serve as general partner
of the OLP and to be bound by the OLP Partnership Agreement (and, to the extent
applicable, the MLP Partnership Agreement), as each is amended by this Agreement
or as may be further amended by the terms of the respective partnership
agreement, and GP Inc. is hereby admitted as the successor general partner of
the OLP.
ARTICLE IV
ASSUMPTION OF AND INDEMNIFICATION FOR CERTAIN LIABILITIES
4.1 Assumption of Certain Liabilities and Obligations of
Riverwalk by GP Inc. In connection with the transfer of the Revised OLP General
Partner Interest and the succession by GP Inc. as general partner of the OLP, GP
Inc. hereby assumes and agrees to duly and timely pay, perform and discharge all
liabilities and obligations of the OLP to the full extent (and only to the
extent) that Riverwalk, as general partner of the OLP, has been or would have
been in the future, were it not for the execution and delivery of this
Agreement, obligated to pay, perform and discharge such liabilities and
obligations.
4.2 Indemnification of GP Inc. Upon the contribution and
assignment of the Revised OLP General Partner Interest to GP Inc. pursuant to
Section 2.1 and GP Inc.'s succession as general partner of the OLP, Riverwalk
hereby indemnifies, defends and holds harmless GP Inc. from and against any and
all claims, demands, costs, liabilities and expenses (including court costs and
reasonable attorney's fees) arising from or relating to the OLP Excess
Liabilities.
4.3 Indemnification Relating to the MLP. Upon the contribution
of the Revised OLP Limited Partner Interest to the MLP pursuant to Section 2.3,
(i) the MLP hereby indemnifies, defends and holds harmless GP Inc. from and
against any and all claims, demands, costs, liabilities and expenses (including
court costs and reasonable attorney's fees) arising from
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or relating to the OLP Excess Liabilities and (ii) Riverwalk hereby indemnifies,
defends and holds harmless the MLP from and against any and all claims, demands,
costs, liabilities and expenses (including court costs and reasonable attorney's
fees) arising by reason of clause (i) of this Section 4.3.
ARTICLE V
AMENDMENTS TO PARTNERSHIP AGREEMENTS
5.1 Amendments to the OLP Partnership Agreement. In order to
further the purposes of this Agreement, each of Riverwalk, as withdrawing
general partner of the OLP, GP Inc., as successor general partner of the OLP,
and the MLP, as limited partner of the OLP, having determined that the following
amendments would not materially adversely affect the limited partners of the
MLP, hereby approve and adopt the following amendments to the OLP Partnership
Agreement in accordance with Article XIII thereof:
(a) Section 1.1 is hereby amended by adding or
amending the definitions of the following terms to read in
their entirety as follows:
"Conflicts Committee" has the meaning
assigned to such term in the MLP Agreement.
"General Partner" means Xxxxxx XX, Inc. and
its successors and permitted assigns as general
partner of the Partnership.
"GP Reorganization Agreement" means the
Reorganization Agreement, dated as of May 30, 2002
among the Partnership, the MLP, the General Partner
and the MLP General Partner.
"MLP General Partner" means Riverwalk
Logistics, L.P. and its successors and permitted
assigns in its capacity as general partner of the
MLP.
"Percentage Interest" means as of the date
of such determination (a) as to the General Partner,
0.01% and (b) as to the Limited Partner, 99.99%.
(b) Section 4.2 is hereby amended to read in its
entirety as follows:
"SECTION 4.2 Transfer of General Partner's
Partnership Interest.
No provision of this Agreement shall be
construed to prevent (and the Limited Partners do
hereby expressly consent to) (i) the transfer by the
General Partner of all or a portion of its General
Partner Interest to one or more Affiliates, which
transferred General Partner Interest, to the extent
not transferred to a successor General Partner, shall
be recharacterized as and constitute a Limited
Partner Interest or (ii) the transfer by the General
Partner, in whole and not in part, of its General
Partner Interest upon its
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merger, consolidation or other combination into any
other Person or the transfer by it of all or
substantially all of its assets to another Person if,
in the case of a transfer described in either clause
(i) or (ii) of this sentence, the rights and duties
of the General Partner with respect to the General
Partner Interest so transferred, or the rights and
duties of a Limited Partner with respect to the
Limited Partner Interest so transferred, are assumed
by the transferee and the transferee agrees to be
bound by the provisions of this Agreement; provided,
however, that in either such case, the transferee is
primarily controlled, directly or indirectly, by the
MLP General Partner or any Person primarily
controlling, directly or indirectly, the MLP General
Partner; provided, further, that in either such case,
such transferee furnishes to the Partnership an
Opinion of Counsel that such merger, consolidation,
combination, transfer or assumption will not result
in a loss of limited liability of the Limited
Partners or cause the Partnership to be taxable as a
corporation or otherwise taxed as an entity for
federal income tax purposes. In the case of a
transfer pursuant to this Section 4.2 to a Person
proposed as a successor general partner of the
Partnership, the transferee or successor (as the case
may be) shall be admitted to the Partnership as the
General Partner immediately prior to the transfer of
the Partnership Interest, and the business of the
Partnership shall continue without dissolution."
(c) Section 5.3 is hereby amended to change the term
"1.0101" to "0.01" and to change the term "98.9899" to
"99.99."
(d) Section 5.5(d)(i) is hereby amended to delete the
phrase "or the conversion of the General Partner's Partnership
Interest to Common Units pursuant to Section 11.3(a)" in the
first sentence thereof.
(e) Section 6.1(a)(ii) is hereby amended to read in
its entirety as follows:
"Second, 100% to the General Partner and the
Limited Partners in accordance with their respective
Percentage Interests."
(f) Section 6.1(b)(i) is hereby amended to read in
its entirety as follows:
"First, 100% to the General Partner and the
Limited Partners in accordance with their respective
Percentage Interests; provided, however, that the Net
Losses shall not be allocated to a Limited Partner
pursuant to this Section 6.1(b)(i) to the extent that
such allocation would cause a Limited Partner to have
deficit balance in its Adjusted Capital Account at
the end of such taxable year (or increase any
existing deficit balance in such Limited Partner's
Adjusted Capital Account);"
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(g) Section 6.1(c)(i)(B) is hereby amended to read in
its entirety as follows:
"Second, 100% to the General Partner and the
Limited Partners in accordance with their respective
Percentage Interests."
(h) The last sentence of Section 7.3(b) is hereby
amended to read in its entirety as follows:
"Without the approval of at least a Unit
Majority, the General Partner shall not (i) consent
to any amendment to this Agreement or except as
expressly permitted by Section 7.9(d) of the MLP
Agreement, take any action permitted to be taken by a
Partner, in either case, that would have a material
adverse effect on the MLP as a Partner or (ii) except
as permitted under Sections 4.2, 11.1 and 11.2 of
this Agreement, elect a successor general partner of
the Partnership."
(i) The last sentence of Section 7.9(b) is hereby
amended to change the term "1.0101%" to "0.01%."
(j) Section 11.1(a)(iv) is hereby deleted in its
entirety and replaced with the word "[Reserved]".
(k) The first sentence of the last paragraph of
Section 11.1(a) is hereby amended in its entirety to read as
follows:
"If an Event of Withdrawal specified in
Section 11.1(a)(v), (vi) or (vii)(A), (B), (C) or (E)
occurs, the Withdrawing General Partner shall give
notice to the Limited Partners within 30 days after
such occurrence."
(l) The second sentence of Section 11.1(b) is hereby
amended to read in its entirety as follows:
"If the General Partner gives a notice of
withdrawal pursuant to Section 11.1(a)(i) hereof, the
Limited Partners may, prior to the effective date of
such withdrawal, elect a successor General Partner."
(m) Section 11.2 is hereby amended to read in its
entirety as follows:
"SECTION 11.2 Removal of the General
Partner. The General Partner may be removed by the
holders of a majority of the Limited Partner
Interests. If the General Partner is removed pursuant
to this Section 11.2, the Limited Partners may, prior
to the effective date of such removal, elect a
successor General Partner. The admission of any such
successor General Partner to the Partnership shall be
subject to the provisions of Section 10.4."
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(n) Section 11.3(a) is hereby amended to delete the
parenthetical in the first sentence and to add a new third
sentence that reads in its entirety as follows:
"Notwithstanding the foregoing, an
assignment of all or any portion of a General
Partner's (or Departing General Partner's)
Partnership Interest to the MLP as Limited Partner,
or to any other Person (other than an individual) the
ownership interest of which is then transferred to
the MLP, can be made in exchange for an increased
interest in the MLP and in lieu of a cash purchase."
(o) Section 12.2(b) is hereby amended to read in its
entirety as follows:
"if the successor General Partner is not the
former General Partner, then the interest of the
former General Partner shall be purchased by the
successor General Partner; and"
(p) Article XV is hereby amended to add the following
immediately after Section 15.10.
"SECTION 15.11 Amendments to Reflect GP
Reorganization Agreement. In addition to the
amendments to this Agreement contained in the GP
Reorganization Agreement and notwithstanding any
other provision of this Agreement to the contrary,
this Agreement shall be deemed to be further amended
and modified to the extent necessary, but only to the
extent necessary, to carry out the purposes and
intent of the GP Reorganization Agreement."
5.2 Amendments to MLP Partnership Agreement. In order to
further the purposes of this Agreement and to evidence the increased interest of
the general partner in the MLP issued in exchange for the contributions to the
MLP made pursuant to Article II hereof, Riverwalk, as general partner of the
MLP, having determined that the following amendments would not materially
adversely affect the limited partners of the MLP, hereby exercises its rights
and powers to amend the MLP Partnership Agreement without the approval of any
limited partner or assignee pursuant to Section 13.1(d)(i) of the MLP
Partnership Agreement, hereby approves and adopts the following amendments to
the MLP Partnership Agreement in accordance with Article XIII thereof:
(a) Section 1.1 is hereby amended by adding or
amending the definitions of the following terms to read in
their entirety as follows:
"GP Reorganization Agreement" means the
Reorganization Agreement, dated as of May 30, 2002,
among the Partnership, the Operating Partnership, the
General Partner and the Operating General Partner.
"Operating General Partner" means Xxxxxx XX,
Inc., a Delaware corporation and wholly owned
subsidiary of the Partnership, and any
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successors and permitted assigns as the general
partner of the Operating Partnership.
"Operating Partnership" means Valero
Logistics Operations, L.P., a Delaware limited
partnership, and such other Persons that are treated
as partnerships for federal income tax purposes that
are majority-owned by the Partnership and controlled
by the Partnership (whether by direct or indirect
ownership of the general partner of such Person or
otherwise) and established or acquired for the
purpose of conducting the business of the
Partnership.
"Operating Partnership Agreement" means the
agreement of limited partnership of any Operating
Partnership that is a limited partnership, or any
limited liability company agreement of any Operating
Partnership that is a limited liability company that
is treated as a partnership for federal income tax
purposes, as such may be amended, supplemented or
restated from time to time.
"Percentage Interest" means as of any date
of determination (a) as to the General Partner (with
respect to its General Partner Interest), 2% and (b)
as to any Unitholder or Assignee holding Units, the
product obtained by multiplying (i) 98% less the
percentage applicable to paragraph (c) by (ii) the
quotient obtained by dividing (A) the number of Units
held by such Unitholder or Assignee by (B) the total
number of all Outstanding Units, and (c) as to
holders of additional Partnership Securities issued
by the Partnership in accordance with Section 5.6,
the percentage established as part of such issuance.
The Percentage Interest with respect to an Incentive
Distribution Right shall at all times be zero.
(b) The definition of Subordination Period in Section
1.1 is hereby amended to delete the phrase "and on the general
partner interest in the Operating Partnership" in clause
(a)(i)(B).
(c) Section 4.6(c)(i) is hereby amended to delete the
phrase "and the Operating Partnership Agreement" both places
it appears.
(d) Section 4.8(b) is hereby amended to delete the
phrase "or Operating Partnership" in the first sentence.
(e) Section 5.2(b) is hereby amended to change the
term "1/99th" to "2/98th."
(f) Section 6.1(a)(ii), Section 6.1(a)(iii), Section
6.1(b)(i) and Section 6.1(b)(ii) are each hereby amended to
change the term "1%" to "2%" and to change the term "99%" to
"98%."
(g) Section 6.1(c)(i) is hereby amended to read in
its entirety as follows:
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"(i) If a Net Termination Gain is recognized
(or deemed recognized pursuant to Section 5.5(d)),
such Net Termination Gain shall be allocated between
the General Partner and the Limited Partners in the
following manner (and the 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 Capital Account, in
the proportion that such deficit balance
bears to the total deficit balances in the
Capital Accounts of all Partners, until each
such Partner has been allocated Net
Termination Gain equal to any such deficit
balance in its Capital Account;
(B) Second, 98% to all Unitholders
holding Common Units, Pro Rata, and 2% to
the General Partner, in accordance with
their respective Percentage Interests, until
the Capital Account in respect of each
Common Unit then Outstanding is equal to the
sum of (1) its Unrecovered Capital plus (2)
the Minimum Quarterly Distribution for the
Quarter during which the Liquidation Date
occurs, reduced by any distribution pursuant
to Section 6.4(a)(i) or (b)(i) with respect
to such Common Unit for such Quarter (the
amount determined pursuant to this clause
(2) is hereinafter defined as the "Unpaid
MQD") plus (3) any then existing Cumulative
Common Unit Arrearage;
(C) Third, if such Net Termination
Gain is recognized (or is deemed to be
recognized) prior to the expiration of the
Subordination Period, 98% to all Unitholders
holding Subordinated Units, Pro Rata, and 2%
to the General Partner until the Capital
Account in respect of each Subordinated Unit
then Outstanding equals the sum of (1) its
Unrecovered Capital, determined for the
taxable year (or portion thereof) to which
this allocation of gain relates, plus (2)
the Minimum Quarterly Distribution for the
Quarter during which the Liquidation Date
occurs, reduced by any distribution pursuant
to Section 6.4(a)(iii) with respect to such
Subordinated Unit for such Quarter;
(D) Fourth, 90% to all Unitholders,
Pro Rata, 8% to the holders of the Incentive
Distribution Rights, Pro Rata, and 2% to the
General Partner until the Capital Account in
respect of each Common Unit then Outstanding
is equal to the sum of (1) its Unrecovered
Capital, plus (2) the Unpaid MQD, plus (3)
any then existing Cumulative Common Unit
Arrearage, plus (4) the excess of (aa) the
First Target Distribution less the Minimum
Quarterly Distribution for each Quarter of
the Partnership's existence over (bb) the
cumulative per Unit amount of any
distributions of
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Operating Surplus that was distributed
pursuant to Sections 6.4(a)(iv) and
6.4(b)(ii) (the sum of (1) plus (2) plus (3)
plus (4) is hereinafter defined as the
"First Liquidation Target Amount");
(E) Fifth, 75% to all Unitholders,
Pro Rata, 23% to the holders of the
Incentive Distribution Rights, Pro Rata, and
2% to the General Partner until the Capital
Account in respect of each Common Unit then
Outstanding 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
cumulative per Unit amount of any
distributions of Operating Surplus that was
distributed pursuant to Sections 6.4(a)(v)
and 6.4(b)(iii) (the sum of (1) plus (2) is
hereinafter defined as the "Second
Liquidation Target Amount"); and
(F) Finally, any remaining amount
50% to all Unitholders, Pro Rata, 48% to
the holders of the Incentive Distribution
Rights, Pro Rata, and 2% to the General
Partner."
(h) Section 6.1(c)(ii)(A) and Section 6.1(c)(ii)(B)
are each hereby amended to change the term "99%" to "98%" and
to change the term "1%" to "2%."
(i) Sections 6.4 and 6.5 are hereby amended to read
in their entirety as follows:
"SECTION 6.4 Distributions of Available Cash
from Operating Surplus.
(a) During Subordination Period. Available
Cash with respect to any Quarter within the
Subordination Period that is deemed to be Operating
Surplus pursuant to the provisions of Section 6.3 or
6.5 shall, subject to Section 17-607 of the Delaware
Act, be distributed as follows, except as otherwise
required by Section 5.6(b) in respect of additional
Partnership Securities issued pursuant thereto:
(i) First, 98% to the Unitholders
holding Common Units, Pro Rata, and
2% to the General Partner until
there has been distributed in
respect of each Common Unit then
Outstanding an amount equal to the
Minimum Quarterly Distribution for
such Quarter;
(ii) Second, 98% to the Unitholders
holding Common Units, Pro Rata, and
2% to the General Partner until
there has been distributed in
respect of each Common Unit then
Outstanding an amount equal to the
Cumulative Common Unit Arrearage
existing with respect to such
Quarter;
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(iii) Third, 98% to the Unitholders
holding Subordinated Units, Pro
Rata, and 2% to the General Partner
until there has been distributed in
respect of each Subordinated Unit
then Outstanding an amount equal to
the Minimum Quarterly Distribution
for such Quarter;
(iv) Fourth, 90% to all Unitholders, Pro
Rata, 8% to the holders of the
Incentive Distribution Rights, Pro
Rata, and 2% to the General Partner
until there has been distributed in
respect of each Unit then
Outstanding an amount equal to the
excess of the First Target
Distribution over the Minimum
Quarterly Distribution for such
Quarter;
(v) Fifth, 75% to all Unitholders, Pro
Rata, 23% to the holders of the
Incentive Distribution Rights, Pro
Rata, and 2% to the General Partner
until there has been distributed in
respect of each Unit then
Outstanding an amount equal to the
excess of the Second Target
Distribution over the First Target
Distribution for such Quarter; and
(vi) Thereafter, 50% to all Unitholders,
Pro Rata, 48% to the holders of the
Incentive Distribution Rights, Pro
Rata, and 2% to the General
Partner;
provided, however, if the Minimum Quarterly
Distribution, the First Target Distribution and the
Second Target Distribution have been reduced to zero
pursuant to the second sentence of Section 6.6(a),
the distribution of Available Cash that is deemed to
be Operating Surplus with respect to any Quarter will
be made solely in accordance with Section 6.4(a)(vi).
(b) After Subordination Period. Available
Cash with respect to any Quarter after the
Subordination Period that is deemed to be Operating
Surplus pursuant to the provisions of Section 6.3 or
6.5, subject to Section 17-607 of the Delaware Act,
shall be distributed as follows, except as otherwise
required by Section 5.6(b) in respect of additional
Partnership Securities issued pursuant thereto:
(i) First, 98% to all Unitholders, Pro
Rata, and 2% to the General Partner
until there has been distributed in
respect of each Unit then
Outstanding an amount equal to the
Minimum Quarterly Distribution for
such Quarter;
(ii) Second, 90% to all Unitholders, Pro
Rata, and 8% to the holders of the
Incentive Distribution Rights, Pro
Rata, and 2% to the General Partner
until there has been distributed in
respect of each Unit then
Outstanding an amount equal to
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the excess of the First Target
Distribution over the Minimum
Quarterly Distribution for such
Quarter;
(iii) Third, 75% to all Unitholders, Pro
Rata, and 23% to the holders of the
Incentive Distribution Rights, Pro
Rata, and 2% to the General Partner
until there has been distributed in
respect of each Unit then
Outstanding an amount equal to the
excess of the Second Target
Distribution over the First Target
Distribution for such Quarter; and
(iv) Thereafter, 50% to all Unitholders,
Pro Rata, and 48% to the holders of
the Incentive Distribution Rights,
Pro Rata, and 2% to the General
Partner;
provided, however, if the Minimum Quarterly
Distribution, the First Target Distribution and the
Second Target Distribution have been reduced to zero
pursuant to the second sentence of Section 6.6(a),
the distribution of Available Cash that is deemed to
be Operating Surplus with respect to any Quarter will
be made solely in accordance with Section 6.4(b)(iv).
"SECTION 6.5 Distributions of Available Cash
from Capital Surplus.
Available Cash that is deemed to be
Capital Surplus pursuant to the provisions
of Section 6.3(a) shall, subject to Section
17-607 of the Delaware Act, be distributed,
unless the provisions of Section 6.3 require
otherwise, 98% to all Unitholders, Pro Rata,
and 2% to the General Partner until a
hypothetical holder of a Common Unit
acquired on the Closing Date has received
with respect to such Common Unit, during the
period since the Closing Date through such
date, distributions of Available Cash that
are deemed to be Capital Surplus in an
aggregate amount equal to the Initial Unit
Price. Available Cash that is deemed to be
Capital Surplus shall then be distributed
98% to all Unitholders holding Common Units,
Pro Rata, and 2% to the General Partner
until there has been distributed in respect
of each Common Unit then Outstanding an
amount equal to the Cumulative Common Unit
Arrearage. Thereafter, all Available Cash
shall be distributed as if it were Operating
Surplus and shall be distributed in
accordance with Section 6.4."
(j) Section 7.1(a)(xiv) is hereby amended to read in
its entirety as follows:
"the undertaking of any action in connection
with the Partnership's ownership or operation of any
Group Member, including exercising, on
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behalf and for the benefit of the Partnership, the
Partnership's rights as the sole stockholder of the
Operating General Partner."
(k) Section 7.3(b) is hereby amended to delete the
phrase "of the Partnership or the Operating Partnership" in
the last line of that section.
(l) Section 7.5(a) is hereby amended to delete the
references to the Operating Partnership.
(m) Section 7.8(d) is hereby amended to add the
phrase "and the Operating General Partner's" immediately prior
to the word "directors."
(n) Section 7.9(b) is hereby amended to change the
term "1%" to "2%" in the last sentence of such section.
(o) Section 9.4 is hereby amended to delete the
phrase "and the Operating Partnership."
(p) Section 11.1(a)(i) is hereby amended to read in
its entirety as follows:
"The General Partner voluntarily withdraws
from the Partnership by giving notice to the other
Partners."
(q) Section 11.3(a) is hereby amended to delete the
phrase "or the Operating Partnership Agreement" in the second
sentence of such paragraph.
(r) Section 11.3(c) is hereby amended to change the
term "1/99th" to "2/98th" and to change the term "1%" to "2%".
(s) Article XVI is hereby amended to add the
following immediately after Section 16.10:
"SECTION 16.11 Amendments to Reflect GP
Reorganization Agreement. In addition to the
amendments to this Agreement contained in the GP
Restructuring Agreement and notwithstanding any other
provision of this Agreement to the contrary, this
Agreement shall be deemed to be further amended and
modified to the extent necessary, but only to the
extent necessary, to carry out the purposes and
intent of the GP Reorganization Agreement."
5.3 Restatement of Partnership Agreements. Each of the
partners of the MLP and the OLP that is a party hereto agrees to execute and
deliver a restated and amended version of each of the MLP Partnership Agreement
and the OLP Partnership Agreement to which it is a party incorporating the
amendments to such agreement adopted by this Agreement together with such other
amendments intended to clarify the agreement as the general partner of such
limited partnership determines as are appropriate and not having a material
adverse effect on the limited partners of the partnership, and in the case of
the MLP, the holders of outstanding Units therein.
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ARTICLE VI
MISCELLANEOUS
6.1 Other Assurances. From time to time after the date hereof,
and without any further consideration, each of the parties to this Agreement
shall execute, acknowledge and deliver all such additional instruments, notices
and other documents, and will do all such other acts and things, all in
accordance with applicable law, as may be necessary or appropriate to more fully
and effectively carry out the purposes and intent of this Agreement.
6.2 Costs. The MLP shall pay all expenses arising out of the
contributions, assignments and deliveries to be made hereunder, including the
expenses of amending the MLP Partnership Agreement and the OLP Partnership
Agreement.
6.3 Successors and Assigns. The Agreement shall be binding
upon and inure to the benefit of the parties signatory hereto and their
respective successors and assigns.
6.4 No Third Party Rights. The provisions of this Agreement
are intended to bind the parties signatory hereto as to each other and are not
intended to and do not create rights in any other person or confer upon any
other person any benefits, rights or remedies and no person is or is intended to
be a third party beneficiary of any of the provisions of this Agreement.
6.5 Counterparts. This Agreement may be executed in any number
of counterparts, all of which together shall constitute one agreement binding on
the parties hereto.
6.6 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware.
6.7 Amendment or Modification. This Agreement may be amended
or modified from time to time only by the written agreement of all the parties
hereto.
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IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties hereto as of the date first above written.
XXXXXX X.X.
By: Riverwalk Logistics, L.P., as general
partner
By: Xxxxxx XX, LLC, as general
partner
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President and CEO
VALERO LOGISTICS OPERATIONS, L.P.
By: Riverwalk Logistics, L.P., as general
partner
By: Xxxxxx XX, LLC, as general
partner
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President and CEO
RIVERWALK LOGISTICS, L.P.
By: Xxxxxx XX, LLC, as general partner
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President and CEO
XXXXXX XX, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President and CEO
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