EXHIBIT 3.1
THIRD AMENDED AND RESTATED AGREEMENT
OF
LIMITED PARTNERSHIP
OF
▇▇▇▇▇▇ ▇▇▇▇▇▇ ENERGY PARTNERS, L.P.
2
TABLE OF CONTENTS
ARTICLE I ORGANIZATIONAL MATTERS........................................................................2
1.1 Continuation..................................................................................2
1.2 Name..........................................................................................2
1.3 Registered Office; Principal Office...........................................................2
1.4 Power of Attorney.............................................................................2
1.5 Term..........................................................................................3
1.6 Possible Restrictions on Transfer.............................................................4
ARTICLE II DEFINITIONS...................................................................................4
Additional Limited Partner...............................................................................4
Adjusted Capital Account.................................................................................4
Adjusted Property........................................................................................4
Affiliate................................................................................................5
Agreed Allocation........................................................................................5
Agreed Value.............................................................................................5
Agreement ...............................................................................................5
API......................................................................................................5
Assignee.................................................................................................5
Available Cash...........................................................................................5
Average Market Price.....................................................................................6
Book-Tax Disparity.......................................................................................6
Business Day.............................................................................................6
Calculated Unit Amount...................................................................................7
Capital Account..........................................................................................7
Capital Additions and Improvements.......................................................................7
Capital Contribution.....................................................................................7
Carrying Value...........................................................................................7
Cash from Interim Capital Transactions...................................................................7
Cash from Operations.....................................................................................7
Cause....................................................................................................8
Central Basin Conveyances................................................................................8
Certificate..............................................................................................8
Certificate of Limited Partnership.......................................................................8
Citizenship Certification................................................................................9
Class B Unit.............................................................................................9
Closing Date.............................................................................................9
Closing Price............................................................................................9
Code.....................................................................................................9
Combined Interest........................................................................................9
Common Unit..............................................................................................9
Conflicts and Audit Committee............................................................................9
Contributed Property.....................................................................................9
Conveyance Agreement.....................................................................................9
Curative Allocation......................................................................................9
Current Market Price.....................................................................................9
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Delaware Act............................................................................................10
Delegation of Control Agreement.........................................................................10
Departing Partner.......................................................................................10
Economic Risk of Loss...................................................................................10
Eligible Citizen........................................................................................10
Enron...................................................................................................10
Equivalent Non-Cash Amount..............................................................................10
Event of Withdrawal.....................................................................................10
Exchange Provisions.....................................................................................10
First Amended and Restated Agreement....................................................................10
First Liquidation Target Amount.........................................................................10
First Target Distribution...............................................................................10
General Partner.........................................................................................10
Group...................................................................................................10
Holder..................................................................................................10
I-Unit..................................................................................................10
Incentive Distribution..................................................................................11
Indemnified Persons.....................................................................................11
Indemnitee..............................................................................................11
Initial Offering........................................................................................11
Initial Unit Price......................................................................................11
Interim Capital Transactions............................................................................11
KMGP....................................................................................................11
KMI.....................................................................................................11
KMM.....................................................................................................11
KMNGL...................................................................................................11
Limited Partner.........................................................................................11
Liquidation Date........................................................................................11
Liquidator..............................................................................................12
Listed Shares...........................................................................................12
LLC Agreement...........................................................................................12
Maintenance Capital Expenditures........................................................................12
Mandatory Purchase Event................................................................................12
Maximum Permitted Delegation............................................................................12
Mandatory Redemption Notice.............................................................................12
Merger Agreement........................................................................................12
Minimum Quarterly Distribution..........................................................................12
National Securities Exchange............................................................................12
Net Agreed Value........................................................................................12
Net Income..............................................................................................12
Net Loss................................................................................................13
Net Termination Gain....................................................................................13
Net Termination Loss....................................................................................13
Non-citizen Assignees...................................................................................13
Nonrecourse Built-in Gain...............................................................................13
Nonrecourse Deductions..................................................................................14
Nonrecourse Liability...................................................................................14
Notice of Election to Purchase..........................................................................14
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Notice of Intent to Convert.............................................................................14
OLP-A...................................................................................................14
OLP-A Partnership Agreement.............................................................................14
Omnibus Agreement.......................................................................................14
Operating Partnership...................................................................................14
Operating Partnership Agreement.........................................................................14
Opinion of Counsel......................................................................................14
Optional Purchase Price.................................................................................14
Original Agreement......................................................................................14
Outstanding.............................................................................................14
Partners................................................................................................15
Partner Nonrecourse Debt................................................................................15
Partner Nonrecourse Debt Minimum Gain...................................................................15
Partner Nonrecourse Deductions..........................................................................15
Partnership.............................................................................................15
Partnership Interest....................................................................................15
Partnership Minimum Gain................................................................................15
Partnership Securities..................................................................................15
Percentage Interest.....................................................................................15
Person..................................................................................................15
Pipeline System and Other Assets........................................................................15
Pro Rata................................................................................................16
Purchase Date...........................................................................................16
Purchase Provisions.....................................................................................16
Recapture Income........................................................................................16
Record Date.............................................................................................16
Record Holder...........................................................................................16
Redeemable Units........................................................................................16
Registration Statement..................................................................................16
Required Allocations....................................................................................16
Residual Gain...........................................................................................16
Residual Loss...........................................................................................16
Second Amended and Restated Agreement...................................................................17
Second Liquidation Target Amount........................................................................17
Second Target Distribution..............................................................................17
Securities Act..........................................................................................17
Share Distribution......................................................................................17
Special Approval........................................................................................17
Substituted Limited Partner.............................................................................17
Surviving Business Entity...............................................................................17
Termination Capital Transactions........................................................................17
Third Target Distribution...............................................................................17
Trading Day.............................................................................................17
Transfer Agent..........................................................................................17
Transfer Application....................................................................................17
Underwriter.............................................................................................17
Underwriting Agreement..................................................................................17
Unit....................................................................................................17
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Unpaid MQD..............................................................................................18
Unrealized Gain.........................................................................................18
Unrealized Loss.........................................................................................18
Unrecovered Initial Unit Price..........................................................................18
ARTICLE III PURPOSE......................................................................................18
3.1 Purpose and Business.........................................................................18
3.2 Powers.......................................................................................18
ARTICLE IV CAPITAL CONTRIBUTIONS........................................................................18
4.1 Issuances of Units and Other Securities......................................................18
4.2 Limited Preemptive Rights....................................................................20
4.3 Capital Accounts.............................................................................20
4.4 Interest.....................................................................................22
4.5 No Withdrawal................................................................................23
4.6 Loans from Partners..........................................................................23
4.7 No Fractional Units..........................................................................23
4.8 Splits and Combinations......................................................................23
4.9 Class B Units................................................................................24
4.10 I-Units......................................................................................25
ARTICLE V ALLOCATIONS AND DISTRIBUTIONS................................................................25
5.1 Allocations for Capital Account Purposes.....................................................25
5.2 Allocations for Tax Purposes.................................................................31
5.3 Requirement and Characterization of Distributions............................................33
5.4 Distributions of Cash from Operations........................................................34
5.5 Distributions of Cash from Interim Capital Transactions......................................34
5.6 Adjustment of Minimum Quarterly Distribution and Target Distribution
Levels..............................................................................35
5.7 Special Provisions Relating to Units.........................................................35
ARTICLE VI MANAGEMENT AND OPERATION OF BUSINESS.........................................................37
6.1 Management...................................................................................37
6.2 Certificate of Limited Partnership...........................................................38
6.3 Restrictions on General Partner's Authority..................................................38
6.4 Reimbursement of the General Partner.........................................................39
6.5 Outside Activities...........................................................................40
6.6 Loans to and from the General Partner; Contracts with Affiliates.............................41
6.7 Indemnification..............................................................................42
6.8 Liability of Indemnitees.....................................................................44
6.9 Resolution of Conflicts of Interest..........................................................44
6.10 Other Matters Concerning the General Partner.................................................46
6.11 Title to Partnership Assets..................................................................46
6.12 Purchase or Sale of Units....................................................................46
6.13 Registration Rights of KMGP and its Affiliates...............................................47
6.14 Reliance by Third Parties....................................................................49
6.15 Delegation to KMM............................................................................49
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ARTICLE VII RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS...................................................50
7.1 Limitation of Liability......................................................................50
7.2 Management of Business.......................................................................50
7.3 Outside Activities...........................................................................50
7.4 Return of Capital............................................................................50
7.5 Rights of Limited Partners Relating to the Partnership.......................................50
ARTICLE VIII BOOKS, RECORDS, ACCOUNTING AND REPORTS.......................................................51
8.1 Books, Records and Accounting................................................................51
8.2 Fiscal Year..................................................................................51
8.3 Reports......................................................................................51
ARTICLE IX TAX MATTERS..................................................................................52
9.1 Preparation of Tax Returns...................................................................52
9.2 Tax Elections................................................................................52
9.3 Tax Controversies............................................................................52
9.4 Organizational Expenses......................................................................53
9.5 Withholding..................................................................................53
9.6 Entity-Level Taxation........................................................................53
9.7 Entity-Level Arrearage Collections...........................................................53
9.8 Opinions of Counsel..........................................................................54
ARTICLE X CERTIFICATES.................................................................................54
10.1 Certificates.................................................................................54
10.2 Registration, Registration of Transfer and Exchange..........................................54
10.3 Mutilated, Destroyed, Lost or Stolen Certificates............................................55
10.4 Record Holder................................................................................55
ARTICLE XI TRANSFER OF INTERESTS........................................................................56
11.1 Transfer.....................................................................................56
11.2 Transfer of General Partner's Partnership Interest...........................................56
11.3 Transfer of Units............................................................................57
11.4 Restrictions on Transfers....................................................................57
11.5 Citizenship Certificates; Non-citizen Assignees..............................................57
11.6 Redemption of Interests......................................................................58
ARTICLE XII ADMISSION OF PARTNERS........................................................................59
12.1 Admission of Substituted Limited Partners....................................................59
12.2 Admission of Successor General Partner.......................................................60
12.3 Admission of Additional Limited Partners.....................................................60
12.4 Amendment of Agreement and Certificate of Limited Partnership................................60
ARTICLE XIII WITHDRAWAL OR REMOVAL OF PARTNERS............................................................61
13.1 Withdrawal of the General Partner............................................................61
13.2 Removal of the General Partner...............................................................62
13.3 Interest of Departing Partner and Successor General Partner..................................63
13.4 Withdrawal of Limited Partners...............................................................64
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ARTICLE XIV DISSOLUTION AND LIQUIDATION..................................................................64
14.1 Dissolution..................................................................................64
14.2 Continuation of the Business of the Partnership after Dissolution............................65
14.3 Liquidation..................................................................................65
14.4 Distributions in Kind........................................................................66
14.5 Cancellation of Certificate of Limited Partnership...........................................67
14.6 Reasonable Time for Winding Up...............................................................67
14.7 Return of Capital............................................................................67
14.8 No Capital Account Restoration...............................................................67
14.9 Waiver of Partition..........................................................................67
ARTICLE XV AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE....................................67
15.1 Amendment to be Adopted Solely by General Partner............................................67
15.2 Amendment Procedures.........................................................................68
15.3 Amendment Requirements.......................................................................69
15.4 Meetings.....................................................................................69
15.5 Notice of Meeting............................................................................70
15.6 Record Date..................................................................................70
15.7 Adjournment..................................................................................70
15.8 Waiver of Notice; Approval of Meeting; Approval of Minutes...................................70
15.9 Quorum.......................................................................................71
15.10 Conduct of Meeting...........................................................................71
15.11 Action Without a Meeting.....................................................................71
15.12 Voting and Other Rights......................................................................72
ARTICLE XVI MERGER.......................................................................................72
16.1 Authority....................................................................................72
16.2 Procedure for Merger or Consolidation........................................................72
16.3 Approval by Limited Partners of Merger or Consolidation......................................73
16.4 Certificate of Merger........................................................................74
16.5 Effect of Merger.............................................................................74
ARTICLE XVII RIGHT TO ACQUIRE UNITS.......................................................................74
17.1 Right to Acquire Common Units and Listed Shares..............................................74
ARTICLE XVIII GENERAL PROVISIONS...........................................................................76
18.1 Addresses and Notices........................................................................76
18.2 References...................................................................................77
18.3 Pronouns and Plurals.........................................................................77
18.4 Further Action...............................................................................77
18.5 Binding Effect...............................................................................77
18.6 Integration..................................................................................77
18.7 Creditors....................................................................................77
18.8 Waiver.......................................................................................77
18.9 Counterparts.................................................................................77
18.10 Applicable Law...............................................................................78
18.11 Invalidity of Provisions.....................................................................78
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Exhibit A - Form of Certificate Evidencing Common Units
Exhibit B - Form of Certificate Evidencing Class B Units
Exhibit C - Form of Certificate Evidencing I-Units
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THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF ▇▇▇▇▇▇ ▇▇▇▇▇▇ ENERGY PARTNERS, L.P.
THIS THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
▇▇▇▇▇▇ ▇▇▇▇▇▇ ENERGY PARTNERS, L.P., dated as of May 18, 2001, is entered
into by and among Kinder ▇▇▇▇▇▇ ▇.▇., Inc., a Delaware corporation, as the
General Partner, and Persons who become Partners in the Partnership or parties
hereto as provided herein.
WHEREAS, the General Partner and the other parties thereto entered into
that certain Agreement of Limited Partnership of the Partnership dated as of
August 6, 1992 (the "Original Agreement"); and
WHEREAS, the General Partner, acting pursuant to Section 15.1 of the
Original Agreement, amended and restated the Original Agreement, as evidenced by
that certain Amended and Restated Agreement of Limited Partnership of the
Partnership dated as of August 6, 1992 (the "First Amended and Restated
Agreement"); and
WHEREAS, the General Partner, acting pursuant to Section 15.1 of the
First Amended and Restated Agreement, amended and restated the First Amended and
Restated Agreement, as evidenced by that certain Second Amended and Restated
Agreement of Limited Partnership of the Partnership, entered into as of January
14, 1998, but effective as of February 14, 1997 (the "Second Amended and
Restated Agreement"); and
WHEREAS, the General Partner, acting pursuant to Section 15.1 of the
Second Amended and Restated Agreement, amended the Second Amended and Restated
Agreement, as evidenced by that certain Amendment No. 1 to Second Amended and
Restated Agreement, dated as of January 20, 2000; and
WHEREAS, the General Partner, acting pursuant to Article IV and Section
15.1 of the Second Amended and Restated Agreement, amended the Second Amended
and Restated Agreement, as evidenced by that certain Amendment No. 2 to Second
Amended and Restated Agreement, dated as of December 21, 2000; and
WHEREAS, pursuant to the authority granted to the General Partner in
the Second Amended and Restated Agreement, as amended, the General Partner
desires (i) to amend the Second Amended and Restated Agreement to create a class
of Units to be designated "I-Units," and to fix the preferences and relative,
participating, optional and other special rights, powers and duties appertaining
to the I-Units, and (ii) to restate the Second Amended and Restated Agreement as
so amended; and
WHEREAS, Article IV and Section 15.1 of the Second Amended and Restated
Agreement permit the General Partner, without the approval of any Limited
Partner or Assignee, to amend the Second Amended and Restated Agreement to
effect the intent hereof;
NOW, THEREFORE, the General Partner does hereby amend and restate the
Second Amended and Restated Agreement, as amended, to provide, in its entirety,
as follows:
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ARTICLE I
ORGANIZATIONAL MATTERS
1.1 CONTINUATION. The General Partner and the Limited Partners hereby
continue the Partnership as a limited partnership pursuant to the provisions of
the Delaware Act. Except as expressly provided to the contrary in this
Agreement, the rights and obligations of the Parties 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.
1.2 NAME. The name of the Partnership shall be "▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy
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 or any Affiliate thereof.
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 Limited Partners.
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, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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 and the address of the General Partner shall be ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, 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.
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 ▇▇▇▇▇, 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
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(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 4.1; 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.
(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.
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 termination of the Partnership in accordance with the
provisions of Article XIV.
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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 for federal income tax purposes from being taxed as an
association taxable as a corporation or otherwise as an entity, including,
without limitation, making any 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 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.
"ADDITIONAL LIMITED PARTNER" means a Person admitted to the Partnership
as a Limited Partner pursuant to Section 12.3 and who is shown as such on the
books and records of the Partnership.
"ADJUSTED CAPITAL ACCOUNT" means the Capital Account maintained for
each Partner as of the end of each fiscal year of the Partnership, (a) increased
by any amounts that such Partner is obligated to restore under the standards set
by Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (or is deemed obligated to
restore under Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)) and (b)
decreased by (i) the amount of all losses and deductions that, as of the end of
such fiscal year, are reasonably expected to be allocated to such Partner in
subsequent years under Sections 704(e)(2) and 706(d) of the Code and Treasury
Regulation Section 1.751-1(b)(2)(ii), and (ii) the amount of all distributions
that, as of the end of such fiscal year, are reasonably expected to be made to
such Partner in subsequent years in accordance with the terms of this Agreement
or otherwise to the extent they exceed offsetting increases to such Partner's
Capital Account that are reasonably expected to occur during (or prior to) the
year in which such distributions are reasonably expected to be made (other than
increases as a result of a minimum gain chargeback pursuant to Section 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" of a Partner in respect of a Common Unit, a Class B
Unit, an I-Unit or any other interest in the Partnership shall be the amount
which such Adjusted Capital Account would be if such Common Unit, Class B Unit,
I-Unit or other interest in the Partnership was 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 4.3(d)(i) or 4.3(d)(ii).
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"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. For purposes of this Agreement,
KMM is an Affiliate of KMGP.
"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).
"AGREED VALUE" of any Contributed Property means the fair market value
of such property at the time of contribution as determined by the General
Partner using such reasonable method of valuation as it may adopt; and 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.
"AGREEMENT" means this Third Amended and Restated Agreement of Limited
Partnership of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy Partners, L.P., as it may be amended,
supplemented or restated from time to time.
"API" means a Partnership Interest that was issued pursuant to the
First Amended and Restated Agreement and in accordance with the Omnibus
Agreement, which Partnership Interest conferred upon the holder thereof only the
rights and obligations specifically provided in the First Amended and Restated
Agreement and the Omnibus Agreement with respect to APIs (and no other rights
otherwise available to holders of a Partnership Interest).
"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.
"AVAILABLE CASH" means, with respect to any calendar quarter:
(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 Partnerships and cash proceeds from
Interim Capital Transactions, but excluding cash proceeds from
Termination Capital Transactions); and
(ii) any reduction in reserves with respect to such
quarter from the level at the end of the prior quarter;
(b) less the sum of:
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(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), capital
expenditures and contributions, if any, to the Operating Partnerships
(but excluding all cash distributions to Partners); and
(ii) any reserves established with respect to such
quarter, and any increase in reserves established with respect to prior
quarters, in such amounts as the General Partner determines in its
reasonable discretion to be necessary or appropriate (x) to provide for
the proper conduct of the business of the Partnership or the Operating
Partnerships (including, without limitation, reserves for future
capital expenditures) or (y) to provide funds for distributions with
respect to Units in respect of any one or more of the next four
calendar quarters or (z) 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 any of the Operating Partnerships is a
party or by which any of them is bound or by which any of their assets
are subject.
Notwithstanding the foregoing, "Available Cash" with respect to any
calendar quarter (A) shall not include any cash receipts or reductions in
reserves or take into account any disbursements made or reserves established
after the Liquidation Date and (B) shall include any distributions of cash (to
the extent such distributions are attributable to transactions and operations
during such quarter) received by the Partnership from the Operating Partnership
after the end of such quarter but on or before the date on which the Partnership
makes its distribution of Available Cash in respect of such quarter pursuant to
Section 5.3. For purposes of determining "Available Cash," the Equivalent
Non-Cash Amount for all I-Units with respect to any calendar quarter will be
disregarded for purposes of determining "Available Cash" in future quarters.
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 such Partners.
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.
"AVERAGE MARKET PRICE" has the meaning assigned to such term in Section
5.7(c).
"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 4.3 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 Texas shall not be regarded as a Business Day.
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"CALCULATED UNIT AMOUNT" has the meaning assigned to such term in
Section 5.7(c).
"CAPITAL ACCOUNT" means the capital account maintained for a Partner or
Assignee pursuant to Section 4.3.
"CAPITAL ADDITIONS AND IMPROVEMENTS" means additions or improvements
(whether in the form of the acquisition or construction of additions or
improvements) to the Pipeline System and Other Assets or the acquisition of an
existing, or the construction of a new, pipeline system (including, without
limitation, related tankage and terminaling facilities) or fractionation
facilities that increase the throughput, deliverable capacity, terminaling
capacity, fractionation capacity (assuming normal operating conditions,
including, without limitation, down-time and maintenance) of the assets of the
Operating Partnership from the throughput, deliverable capacity, terminaling
capacity, fractionation capacity (assuming normal operating conditions,
including, without limitation, down-time and maintenance) immediately prior to
the making or acquisition of such additions or improvements, irrespective of
whether such additions or improvements serve the same or different geographic
markets than are served by the Pipeline System and Other Assets immediately
prior to the making or acquisition of such additions or improvements.
"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 Omnibus Agreement, the Conveyance Agreement or
Sections 4.1 or 13.3(c).
"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 Section 4.3(d)(i) and 4.3(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 calendar quarter but
prior to the Liquidation Date, on a cumulative basis, all cash receipts of the
Partnership and the Operating Partnership (including, without limitation, the
cash balance of the Partnership as of the close of business on the Closing Date
(and including in such cash balance proceeds from the Initial Offering that are
next-day funds), cash proceeds from the sale of APIs and from the exercise of
the Underwriters' over-allotment option granted pursuant to the Underwriting
Agreement (but excluding any cash proceeds from any Interim Capital Transactions
(except to the extent specified in Section 5.3) and Termination Capital
Transactions) during the period since the Closing Date through such date, less
the sum of (a) all cash operating expenditures of the Partnership and the
Operating Partnership during such period, including, without limitation, taxes,
if any, (b) all cash debt service payments of the Partnership and the Operating
Partnership during such period (other than payments or prepayments of principal
and premium required by
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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 made in connection with refinancings or
refundings of indebtedness, provided, that any payment or prepayment of
principal, 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), (c) all cash capital expenditures of the Partnership and the
Operating Partnership during such period, including, without limitation,
Maintenance Capital Expenditures, but excluding (i) cash capital expenditures
made in respect of Capital Additions and Improvements and (ii) cash expenditures
made in payment of transaction expenses relating to Interim Capital
Transactions, (d) an amount equal to revenues collected as a result of
transportation rate increases that are subject to possible refund, (e) any
reserves outstanding as of such date that the General Partner deemed 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 (a) through (d) of this
sentence and (f) any reserves 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 calendar
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 Capital Additions and Improvements and in part
for other purposes, the General Partner's good faith allocation thereof between
the portion made for Capital Additions and Improvements and the portion made for
other purposes shall be conclusive.
"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.
"CENTRAL BASIN CONVEYANCES" means the instruments of conveyance or
assignment pursuant to which Central Basin Funding, Inc., a Delaware
corporation, and certain other entities, conveyed certain properties and assets
relating to a carbon dioxide pipeline located in West Texas to the Operating
Partnership on the Closing Date.
"CERTIFICATE" means (a) a certificate, substantially in the form of
Exhibit A to this Agreement or in such other forms as may be adopted by the
General Partner in its sole discretion, issued by the Partnership evidencing
ownership of one or more Common Units, (b) a certificate, substantially in the
form of Exhibit B to this Agreement or in such other forms as may be adopted by
the General Partner in its sole discretion, issued by the Partnership evidencing
ownership of one or more Class B Units, (c) a certificate, substantially in the
form of Exhibit C to this Agreement or in such other forms as may be adopted by
the General Partner in its sole discretion, issued by the Partnership evidencing
ownership of one or more I-Units, or (d) 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.
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"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.
"CLASS B UNIT" means a Unit representing an interest in the Partnership
as a Limited Partner or Assignee, having the rights and obligations specified
with respect to Class B Units in this Agreement.
"CLOSING DATE" means the first date on which Common Units are sold by
the Partnership to the Underwriters pursuant to the provisions of the
Underwriting Agreement.
"CLOSING PRICE" has the meaning assigned to such term in Section
17.1(a).
"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 provisions of future
law.
"COMBINED INTEREST" has the meaning assigned to such term in Section
13.3(a).
"COMMON UNIT" means a Unit representing an interest in the Partnership
as a Limited Partner or Assignee, having the rights and obligations specified
with respect to Common Units in this Agreement.
"CONFLICTS AND AUDIT COMMITTEE" means a committee of the Board of
Directors of the General Partner composed entirely of one or more directors who
are neither officers nor employees of the General Partner or any of its
Affiliates.
"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 4.3(d), such property shall no longer constitute a
Contributed Property, but shall be deemed an Adjusted Property.
"CONVEYANCE AGREEMENT" means the Conveyance, Contribution and
Assumption agreement, dated as of the Closing Date, among Enron, KMGP, Enron
Pipeline Products, Inc., a Delaware corporation, Enron Gas Processing Company, a
Delaware corporation, KMNGL, Enron Oil Trading & Transportation Company, a
Delaware corporation, Enron Gas Liquids, Inc., a Delaware corporation, Enron
Cogeneration Three Company, a Delaware corporation, the Partnership and OLP-A,
together with the additional conveyance documents and instruments contemplated
thereunder.
"CURATIVE ALLOCATION" means any allocation of an item of income, gain,
deduction, loss or credit pursuant to the provisions of Section 5.1(d)(x).
"CURRENT MARKET PRICE" has the meaning assigned to such term in Section
17.1(a), except that if any Units involved are not listed or admitted to trading
on any National Securities Exchange, such price shall be determined by an
independent investment banking firm or other independent expert selected by the
General Partner.
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"DELAWARE ACT" means the Delaware Revised Uniform Limited Partnership
Act, 6 Del. C. Section 17-101, et seq., as amended, supplemented or restated
from time to time, and any successor to such statute.
"DELEGATION OF CONTROL AGREEMENT" means the Delegation of Control
Agreement dated as of ______, 2001 among KMGP, KMM, the Partnership and the
Operating Partnerships, as amended, supplemented or restated from time to time.
"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.
"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.
"ENRON" means Enron Corp., a Delaware corporation.
"EQUIVALENT NON-CASH AMOUNT" has the meaning assigned to such term in
Section 5.7(c).
"EVENT OF WITHDRAWAL" has the meaning assigned to such term in Section
13.1(a).
"EXCHANGE PROVISIONS" means the exchange provisions that are attached
to the LLC Agreement as Annex A.
"FIRST AMENDED AND RESTATED AGREEMENT" has the meaning assigned to such
term in the introduction to this Agreement.
"FIRST LIQUIDATION TARGET AMOUNT" has the meaning assigned to such term
in Section 5.1(c)(i)(D).
"FIRST TARGET DISTRIBUTION" means $0.3025 per Unit, subject to
adjustment in accordance with Sections 5.6 and 9.6.
"GENERAL PARTNER" means KMGP and its successors as general partner of
the Partnership, unless the context otherwise requires.
"GROUP" means a "group" of Persons as defined in Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder.
"HOLDER" has the meaning assigned to such term in Section 6.13(a).
"I-UNIT" means a Unit representing an interest in the Partnership as a
Limited Partner or Assignee, having the rights and obligations specified with
respect to I-Units in this Agreement.
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INCENTIVE DISTRIBUTION" means any amount of cash distributed to the
General Partner, in its capacity as general partner of the Partnership, pursuant
to Sections 5.4(c), 5.4(d) or 5.4(e) that exceeds that amount equal to 1% of the
aggregate amount of cash then being distributed pursuant to such provisions.
"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.
"INITIAL OFFERING" means the initial offering of Common Units to the
public, as described in the Registration Statement.
"INITIAL UNIT PRICE" means $11.50 per Unit.
"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 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.
"KMGP" means Kinder ▇▇▇▇▇▇ ▇.▇., Inc., a Delaware corporation.
"KMI" means ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc., a Kansas corporation.
"KMM" means ▇▇▇▇▇▇ ▇▇▇▇▇▇ Management, LLC, a Delaware limited liability
company.
"KMNGL" means ▇▇▇▇▇▇ ▇▇▇▇▇▇ Natural Gas Liquids Corp., a Delaware
corporation.
"LIMITED PARTNER" means, unless the context otherwise requires, 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.
"LIQUIDATION DATE" means (a) in the case of an event giving rise to the
dissolution of the Partnership of the type described in Sections 14.2(a) and
(b), 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.
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"LIQUIDATOR" means the General Partner or other Person approved
pursuant to Section 14.3 who performs the functions described therein.
"LISTED SHARES" means the limited liability company interests in KMM
designated in the LLC Agreement as "Listed Shares."
"LLC AGREEMENT" means the Amended and Restated Limited Liability
Company Agreement of KMM dated as of ____________, 2001, including exhibits and
annexes thereto, as it may be amended, supplemented or restated from time to
time.
"MAINTENANCE CAPITAL EXPENDITURES" means cash capital expenditures made
to maintain, up to the level thereof that existed on the Closing Date, the
throughput, deliverable capacity, terminaling capacity, or fractionation
capacity (assuming normal operating conditions, including, without limitation,
down-time and maintenance) of the assets of the Partnership and the Operating
Partnership, taken as a whole, as such assets existed on the Closing Date and
shall, therefore, not include cash capital expenditures made in respect of
Capital Additions and Improvements. Where cash capital expenditures are made in
part to effectuate the capacity maintenance 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 capacity
level and the portion used for other purposes shall be conclusive.
"MANDATORY PURCHASE EVENT" has the meaning assigned to such term in the
Purchase Provisions.
"MAXIMUM PERMITTED DELEGATION" has the meaning assigned to such term in
the Delegation of Control Agreement.
"MANDATORY REDEMPTION NOTICE" has the meaning assigned to such term in
Section 4.9(b).
"MERGER AGREEMENT" has the meaning assigned to such term in Section
16.1.
"MINIMUM QUARTERLY DISTRIBUTION" means $0.275 per Unit per calendar
quarter, subject to adjustment in accordance with Sections 5.6 and 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 4.3(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 the 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
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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 4.3(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 4.3(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 the 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 4.3(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.
"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 4.3(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 ASSIGNEES" 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 negative
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)(iv) if such properties were disposed of in a taxable
transaction in full satisfaction of such liabilities and for no other
consideration.
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"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).
"NOTICE OF INTENT TO CONVERT" has the meaning assigned to such term in
Section 4.9(b).
"OLP-A" means ▇▇▇▇▇▇ ▇▇▇▇▇▇ Operating L.P. "A", a Delaware limited
partnership continued pursuant to the OLP-A Partnership Agreement.
"OLP-A PARTNERSHIP AGREEMENT" means the Amended and Restated Agreement
of Limited Partnership of OLP-A dated as of August 6, 1992, as it may be
amended, supplemented or restated from time to time.
"OMNIBUS AGREEMENT" means the Omnibus Agreement, dated as of the
Closing Date, among Enron, the Partnership, OLP-A and KMGP.
"OPERATING PARTNERSHIP" means OLP-A provided, however, that unless the
context otherwise requires, any references herein to the term "Operating
Partnership" or "Operating Partnerships" shall also be deemed to include, to the
extent of the Partnership's ownership interest therein, any partnerships, joint
ventures or other entities formed or acquired by the Partnership in connection
with the conduct by the Partnership of activities permitted by the terms of
Section 3.1.
"OPERATING PARTNERSHIP AGREEMENT" means the OLP-A Partnership
Agreement; provided, however, that unless the context otherwise requires, any
references to the term "Operating Partnership Agreement" or "Operating
Partnership Agreements" shall also be deemed to include the partnership or other
governing charter agreement for any partnership, joint venture or other entity
formed or acquired by the Partnership in connection with the conduct by the
Partnership of activities permitted by the terms of Section 3.1.
"OPINION OF COUNSEL" means a written opinion of counsel (who may be
regular counsel to KMI, any Affiliate of KMI, the Partnership or the General
Partner) acceptable to the General Partner.
"OPTIONAL PURCHASE PRICE" has the meaning assigned to such term in
Section 17.1.
"ORIGINAL AGREEMENT" has the meaning assigned to such term in the
introduction to this Agreement.
"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 the General Partner and its Affiliates) owns beneficially 20%
or more of the aggregate number of Listed Shares and Common Units on a combined
basis, such
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Common Units so owned and the number of I-Units corresponding to the Listed
Shares 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,
calculating required votes, determining the presence of a quorum or for other
similar purposes under this Agreement, except that such Common Units and I-Units
shall be considered to be Outstanding for purposes of Section 13.1(b)(iv).
"PARTNERS" means the General Partner; the Limited Partners; and solely
for purposes of Articles IV, V and VI and Sections 14.3 and 14.4, the Assignees.
"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(f)(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.
"PARTNERSHIP" means the limited partnership heretofore formed and
continued pursuant to this Agreement.
"PARTNERSHIP INTEREST" means an interest in the Partnership, which
shall include general partner interests, Units 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 4.1(b).
"PERCENTAGE INTEREST" means as of the date of such determination (a) as
to the General Partner, 1%, (b) as to any Limited Partner or Assignee holding
Units, the product of (i) 99% multiplied by (ii) the quotient of the number of
Units held by such Limited Partner or Assignee divided by the total number of
all Units then Outstanding, provided, however, that following any issuance of
additional Partnership Securities by the Partnership in accordance with Sections
4.1, 5.4 or 5.5, proper adjustment shall be made to the Percentage Interest
represented by each Unit to reflect such issuance, and (c) as to the holders of
additional Partnership Securities issued by the Partnership in accordance with
Sections 4.1, 5.4 or 5.5, the percentage established as a part of such issuance.
"PERSON" means an individual or a corporation, partnership, trust,
unincorporated organization, association or other entity.
"PIPELINE SYSTEM AND OTHER ASSETS" means the natural gas liquid
pipeline assets and related terminating facilities, the CO2 pipeline assets, the
stock of KMNGL and other facilities and assets, all as more fully described in
the Conveyance Agreement and the Central Basin
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Conveyances, that on the Closing Date are conveyed and contributed or sold to
OLP-A or owned by KMNGL.
"PRO RATA" means (a) when modifying Units or any class thereof,
apportioned equally among all designated Units in accordance with their relative
Percentage Interests and (b) when modifying Partners and Assignees, apportioned
among all designated Partners and Assignees in accordance with their relative
Percentage Interests.
"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.
"PURCHASE PROVISIONS" means the purchase provisions that are attached
to the LLC Agreement as Annex B.
"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.
"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.
"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. 33-48142), as it may have been amended or supplemented from
time to time, filed by the Partnership with the Securities and Exchange
Commission under the Securities Act to register the offering and sale of the
Common Units in the Initial Offering.
"REQUIRED ALLOCATIONS" means any allocation (or limitation imposed on
any allocation) of an item of income, gain, deduction or loss pursuant to (a)
the proviso-clause of 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.
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"SECOND AMENDED AND RESTATED AGREEMENT" has the meaning assigned to
such term in the introduction to this Agreement.
"SECOND LIQUIDATION TARGET AMOUNT" has the meaning assigned to such
term in Section 5.1(c)(i)(E).
"SECOND TARGET DISTRIBUTION" means $0.3575 per Unit, subject to
adjustment in accordance with Sections 5.6 and 9.6.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and any
successor to such statute.
"SHARE DISTRIBUTION" has the meaning assigned to such term in the LLC
Agreement.
"SPECIAL APPROVAL" means approval by a majority of the members of the
Conflicts and Audit Committee.
"SUBSTITUTED LIMITED PARTNER" means a Person who is admitted as a
Limited Partner to the Partnership pursuant to Section 12.1 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 TARGET DISTRIBUTION" means $0.4675 per Unit, subject to
adjustment in accordance with Sections 5.6 and 9.6.
"TRADING DAY" has the meaning assigned to such term in Section 17.1(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.
"UNDERWRITER" means each Person named as an underwriter in Schedule I
to the Underwriting Agreement who purchases Units pursuant thereto.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement dated July
30, 1992, among the Underwriters, the Partnership, the General Partner, OLP-A
and Enron providing for the purchase of Common Units by such Underwriters.
"UNIT" means a Partnership Interest of a Limited Partner or Assignee in
the Partnership and shall include, without limitation, Common Units, Class B
Units and I-Units.
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"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
4.3(d)) over (b) the Carrying Value of such property as of such date (prior to
any adjustment to be made pursuant to Section 4.3(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 4.3(d) as of such date) over (b) the fair market value of
such property as of such date (as determined under Section 4.3(d)).
"UNRECOVERED INITIAL UNIT PRICE" means, at any time, with respect to a
Unit, the Initial Unit Price, less the sum of all distributions theretofore made
in respect of a Common Unit issued in the Initial Offering constituting, and
which for purposes of determining the priority of such distribution is treated
as constituting, Cash from Interim Capital Transactions and of 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 Common Unit issued in the Initial Offering.
ARTICLE III
PURPOSE
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 OLP-A
and, in connection therewith, to exercise all of the rights and powers conferred
upon the Partnership as a limited partner in the OLP-A pursuant to the OLP-A
Partnership Agreement or otherwise, (b) to engage directly in, or to enter into
any partnership, joint venture or similar arrangement to engage in, any business
activity or project that may lawfully be conducted or engaged in by a limited
partnership organized pursuant to the Delaware Act and (c) to do anything
necessary or appropriate to the foregoing, including, without limitation, the
making of capital contributions or loans to the Operating Partnership or in
connection with its involvement in the activities referred to in clause (b) of
this sentence. Subject to the other provisions of this Agreement, the
Partnership may engage in any business activity. The General Partner has no
obligation or duty to the Partnership, the 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.
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.
ARTICLE IV
CAPITAL CONTRIBUTIONS
4.1 ISSUANCES OF UNITS AND OTHER SECURITIES. (a) The initial Capital
Contributions of the General Partner and the initial Limited Partners were made
in accordance with Section 4.3 of the First Amended and Restated Agreement.
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(b) The General Partner is hereby authorized to cause the Partnership
to issue, in addition to the Partnership Interests and Units issued heretofore
by the Partnership, such additional 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, or 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 4.1 and the requirements of the Delaware Act, in determining the
consideration and terms and conditions with respect to any future issuance of
Partnership Securities.
(c) Additional Partnership Securities to be issued by the Partnership
pursuant to this Section 4.1 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, all as shall be
fixed by the General Partner in the exercise of its sole discretion, subject to
Delaware law, 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.
(d) Upon the issuance of any Partnership Interests by the Partnership
(other than I-Units or fractions of I-Units pursuant to Section 5.4, 5.5, or
5.7(e)) or the making of any other Capital Contributions to the Partnership, the
General Partner shall be required to make additional Capital Contributions to
the Partnership such that the General Partner shall at all times have a balance
in its Capital Account with respect to its general partner interest equal to 1%
of the total positive Capital Account balances of all Partners.
(e) 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 or other Partnership Securities pursuant to Section 4.1(b) 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 or other Partnership Securities being so issued.
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(f) The General Partner is authorized to cause the issuance of
Partnership Securities (other than I-Units) pursuant to any employee benefit
plan for the benefit of employees responsible for the operations of the
Partnership or the Operating Partnerships maintained or sponsored by the General
Partner, the Partnership, the Operating Partnerships or any Affiliate of any of
them.
(g) 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.
4.2 LIMITED PREEMPTIVE RIGHTS. Except as provided in this Section 4.2,
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 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 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 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 or other
Partnership Securities from the Partnership whenever, and on the same terms
that, the Partnership issues Units 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 or
other Partnership Securities.
4.3 CAPITAL ACCOUNTS. (a) The Partnership shall maintain for each
Partner (or a 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) 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
4.3(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 4.3(b) and allocated with
respect to such Partnership Interest pursuant to Section 5.1.
(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
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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 4.3, 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 Agreement) 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 4.3(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,
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to the extent possible, be allocated in the same manner to the Partners
to whom such deemed deduction was allocated.
(c) A transferee of a Partnership Interest shall succeed to a
pro rata portion of the Capital Account of the transferor relating to the
Partnership Interest so transferred.
(d) (i) 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 or the conversion of the General Partner's
Partnership Interest to Common Units pursuant to Section 13.3(b), the
Capital Account of all Partners (other than those holding I-Units) and
the Carrying Value of each Partnership property immediately prior to
such issuance shall be adjusted upward or downward to reflect any
Unrealized Gain or Unrealized Loss attributable to such Partnership
property, as if such Unrealized Gain or Unrealized Loss had been
recognized on an actual sale of each such property immediately prior to
such issuance and had been allocated to the Partners at such time
pursuant to Section 5.1. In determining such Unrealized Gain or
Unrealized Loss, the aggregate cash amount and fair market value of all
Partnership assets (including, without limitation, cash or cash
equivalents) immediately prior to the issuance of additional Units
shall be determined by the General Partner using such reasonable method
of valuation as it may adopt. 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 or a distribution of an additional I-Unit (or
fraction thereof) pursuant to Section 5.4, 5.5 or 5.7(e)), the Capital
Accounts of all Partners and the Carrying Value of such 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.
(iii) Upon the issuance of I-Units (or fractions thereof)
pursuant to Section 5.4, 5.5 or 5.7(e), the Capital Accounts of all
I-Units Outstanding prior to such issuance shall be divided equally
among all I-Units Outstanding after such issuance (and any fractional
I-Unit shall be allocated a fractional part of such Capital Accounts).
4.4 INTEREST. No interest shall be paid by the Partnership on Capital
Contributions or on balances in Partners' Capital Accounts.
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4.5 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 Articles V, XIII and XIV.
4.6 LOANS FROM PARTNERS. Loans by a Partner to the Partnership shall
not constitute Capital Contributions. If any Partner shall advance funds to the
Partnership in excess of the amounts required hereunder to be contributed by it
to the capital of the Partnership, the making of such excess advances shall not
result in any increase in the amount of the Capital Account of such Partner. The
amount of any such excess advances shall be a debt obligation of the Partnership
to such Partner and shall be payable or collectible only out of the Partnership
assets in accordance with the terms and conditions upon which such advances are
made.
4.7 NO FRACTIONAL UNITS. Except with respect to I-Units, no fractional
Units shall be issued by the Partnership.
4.8 SPLITS AND COMBINATIONS. (a) Subject to Section 4.8(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 and the Capital Accounts of all such classes of distributed,
subdivided or combined Units or other Partnership Securities Outstanding prior
to such distribution, subdivision or combination shall be divided equally among
all such Units or other Partnership Securities Outstanding after 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.
(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 I-Units, the Partnership shall not
issue fractional Units upon any distribution, subdivision or combination of
Units. If a distribution, subdivision or combination of Units would result in
the issuance of fractional Units but for the provisions of Section 4.7 and this
Section 4.8(d), each fractional Unit (other a fractional I-Unit) shall be
rounded to the nearest whole Unit (and a 0.5 Unit shall be rounded to the next
higher Unit).
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4.9 CLASS B UNITS. (a) Pursuant to Article IV and Section 15.1 of the
Second Amended and Restated Agreement, as amended, the General Partner
designated and created a special class of Units designated "Class B Units" and
fixed the designations, preferences and relative, participating, optional or
other special rights, powers and duties of the holders of the Class B Units as
follows:
(b) Each Class B Unit shall be convertible from time to time,
in whole or in part, into one Common Unit from and after such date as the
Partnership has been advised by the New York Stock Exchange that the Common
Units issuable upon any such conversion are eligible for listing on the New York
Stock Exchange. The General Partner shall promptly notify the holders of Class B
Units upon receipt of such advice. Upon written notice to the General Partner
from the holders of at least a majority of the Outstanding Class B Units (a
"Notice of Intent to Convert") given not earlier than one year after the
issuance of the Class B Units, the General Partner shall use its reasonable best
efforts to cause the Partnership to meet any unfulfilled requirements of the New
York Stock Exchange for such listing, including obtaining such approval of the
holders of Common Units as may be required by the New York Stock Exchange for
the issuance of additional Common Units to be listed thereon. If, 120 days after
the date of the Notice of Intent to Convert, the Common Units issuable upon such
conversion have not been approved for listing on the New York Stock Exchange,
then the Partnership shall give written notice thereof to the holders of the
Outstanding Class B Units, whereupon each holder of Outstanding Class B Units
may, at such holder's election at any time thereafter, notify the General
Partner in writing (a "Mandatory Redemption Notice") of such holder's election
to cause the Partnership to redeem such holder's Outstanding Class B Units for
cash. All such Outstanding Class B Units shall be redeemed as of the 60th day
following the date of receipt of such Mandatory Redemption Notice unless, prior
to such 60th day, the General Partner gives written notice to the holders of all
Outstanding Class B Units that it has been advised by the New York Stock
Exchange that the Common Units issuable upon a conversion of Class B Units have
been approved for listing on the New York Stock Exchange, in which case the
Mandatory Redemption Notice shall be deemed to have been withdrawn.
(c) Before any holder of Class B Units shall be entitled to
receive any redemption payment or to convert such holder's Class B Units into
Common Units, as the case may be, it shall surrender the Class B Unit
Certificates therefor, duly endorsed, at the office of the General Partner or of
any transfer agent for the Class B Units. In the case of any such conversion,
the Partnership shall, as soon as practicable thereafter, issue and deliver at
such office to such holder of Class B Units one or more Certificates, registered
in the name of such holder, for the number of Common Units to which such holder
shall be entitled as aforesaid. Such conversion shall be deemed to have been
made as of the date of such surrender of the Class B Units to be converted, and
the person entitled to receive the Common Units issuable upon such conversion
shall be treated for all purposes as the record holder of such Common Units on
said date.
(d) Upon the request of KMI or any of its Affiliates to
register all or any part of the Class B Units pursuant to Section 6.13, the
Class B Units for which registration is so requested may be redeemed by the
Partnership at its election. The Partnership, at its election, may exercise its
option under this Section 4.9(d) by mailing written notice thereof to the
holders of Class B Units for which registration is so requested. Such notice
shall be given not later than 15 days after the receipt by the General Partner
of such registration request and shall fix a date
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for redemption of such Class B Units not less than 30 nor more than 60 days
after the date of such notice.
(e) Any redemption under Section 4.9(b) or Section 4.9(d)
shall be for a cash redemption price equal to the Current Market Price per
Common Unit as of the date fixed for redemption multiplied by 0.955.
(f) From and after a redemption date (unless default shall be
made by the Partnership in providing money for the payment of the redemption
price), the Class B Units redeemed shall no longer be deemed to be Outstanding,
and all rights of the holders thereof as Partners in the Partnership (except the
right to receive from the Partnership the redemption price) shall cease. Class B
Units redeemed pursuant to Section 4.9(b) or Section 4.9(d) shall be restored to
the status of authorized but unissued Units, without designation as to class.
(g) Except as otherwise provided in this Agreement, each Class
B Unit shall be identical to a Common Unit, and the holder of a Class B Unit
shall have the rights of a holder of a Common Unit with respect to, without
limitation, Partnership distributions, voting and allocations of income, gain,
loss or deductions. Except as otherwise provided in this Agreement, all Units
shall vote or consent together as a single class on all matters submitted for a
vote or consent of the Outstanding Units.
(h) The Certificates evidencing Class B Units shall be
separately identified and shall not bear the same CUSIP number as the
Certificates evidencing Common Units or I-Units.
4.10 I-UNITS. (a) Pursuant to Section 4.1, the General Partner hereby
designates and creates a special class of Units designated "I-Units" and fixes
the designations, preferences and relative, participating, optional or other
special rights, powers and duties of the holders of the I-Units as follows:
(b) Except as otherwise provided in Section 5.1(c) upon a
Termination Capital Transaction, a holder of an I-Unit will receive no
allocations of income, gain, loss or deductions. Except for distributions
pursuant to Section 14.3(b), any distributions or payments shall be made to a
holder of an I-Unit in additional I-Units (or fractions thereof) or a security
that has in all material respects the same rights and privileges as the I-Units,
in accordance with Section 5.7.
(c) Except as otherwise provided in this Agreement, each
I-Unit shall have the rights of a holder of a Common Unit with respect to
voting. Except as otherwise provided in this Agreement, all Units shall vote or
consent together as a single class on all matters submitted for a vote or
consent of the Outstanding Units.
(d) The Certificates evidencing I-Units shall be separately
identified and shall not bear the same CUSIP number as the Certificates
evidencing Common Units or Class B Units.
ARTICLE V
ALLOCATIONS AND DISTRIBUTIONS
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
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Partnership's items of income, gain, loss and deduction (computed in accordance
with Section 4.3(b)) shall be allocated among the Partners in each taxable year
(or portion thereof) as provided herein below.
(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, 100% to the General Partner until the
aggregate Net Income allocated to the General Partner pursuant to this
Section 5.1(a)(i) 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)(iii) for all previous taxable years;
(ii) Second, 99% to the Limited Partners holding
Common Units and Class B Units, Pro Rata, and 1% to the General Partner
until the aggregate Net Income allocated to such Partners 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 such
Partners pursuant to Section 5.1(b)(ii) for all previous taxable years;
and
(iii) Third, the balance, if any, 99% to the Limited
Partners holding Common Units and Class B Units, Pro Rata, and 1% to
the General Partner.
(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, 99% to the Limited Partners holding Common
Units and Class B Units, Pro Rata, and 1% to the General Partner until
the aggregate Net Losses allocated 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)(iii) for all previous taxable years;
(ii) Second, 99% to the Limited Partners holding
Common Units and Class B Units, Pro Rata, and 1% to the General
Partner; provided, that the Net Losses shall not be allocated pursuant
to this Section 5.1(b)(ii) to the extent that such allocation would
cause any Partner 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, 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
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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 4.3(d)) from Termination Capital
Transactions, such Net Termination Gain shall be allocated between the
General Partner and the Limited 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;
(B) Second, if the Adjusted Capital Account
of an I-Unit is less than the Adjusted Capital Account of a
Common Unit, 99% to the Limited Partners holding I-Units and
1% to the General Partner until the Adjusted Capital Account
of each I-Unit equals the Adjusted Capital Account of each
Common Unit or, if the Adjusted Capital Account of an I-Unit
is greater than the Adjusted Capital Account of a Common Unit,
99% to the Limited Partners holding Common Units and Class B
Units and 1% to the General Partner until the Adjusted Capital
Account of each Common Unit and Class B Unit equals the
Adjusted Capital Account of each I-Unit;
(C) Third, 99% to the Limited Partners
holding I-Units, Common Units and Class B Units, Pro Rata, and
1% to the General Partner until the Adjusted Capital Account
in respect of each Unit then Outstanding is equal to the sum
of (1) the 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
pursuant to Section 5.4(a) with respect to such Unit for such
quarter (the amount determined pursuant to this clause (2) is
hereinafter defined as the "Unpaid MQD");
(D) Fourth, 99% to the Limited Partners
holding I-Units, Common Units and Class B Units, Pro Rata, and
1% to the General Partner until the Adjusted Capital Account
in respect of each Unit then Outstanding is equal to the sum
of (aa) the Unrecovered Initial Unit Price, plus (bb) the
Unpaid MQD, plus (cc) the excess of (i) the First Target
Distribution less the Minimum Quarterly Distribution for each
quarter of the Partnership's existence over (ii) the amount of
any distribution of Cash from Operations that was distributed
pursuant to Section 5.4(b) (the sum of (aa) plus (bb) plus
(cc) is hereinafter defined as the "First Liquidation Target
Amount");
(E) Fifth, 85.8673% to the Limited Partners
holding I-Units, Common Units and Class B Units, Pro Rata, and
14.1327% to the General Partner until the Adjusted Capital
Account in respect of each Unit then Outstanding is equal to
the sum of (aa) the First Liquidation Target Amount, plus (bb)
the excess
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of (i) the Second Target Distribution less the First Target
Distribution for each quarter of the Partnership's existence
over (ii) the amount of any distributions of Cash from
Operations that was distributed pursuant to Section 5.4(c)
(the sum of (aa) plus (bb) is hereinafter defined as the
"Second Liquidation Target Amount");
(F) Sixth, 75.7653% to the Limited Partners
holding I-Units, Common Units and Class B Units, Pro Rata, and
24.2347% to the General Partner until the Adjusted Capital
Account in respect of each Unit then Outstanding is equal to
the sum of (aa) the Second Liquidation Target Amount, plus
(bb) the excess of (i) the Third Target Distribution less the
Second Target Distribution for each quarter of the
Partnership's existence over (ii) the amount of any
distributions of Cash from Operations that was distributed
pursuant to Section 5.4(d); and
(G) Finally, any remaining amount 50.5102%
to the Limited Partners holding I-Units, Common Units and
Class B Units, Pro Rata, and 49.4898% to the General Partner.
(ii) If a Net Termination Loss is recognized (or
deemed recognized pursuant to Section 4.3(d)) from Termination Capital
Transactions, such Net Termination Loss shall be allocated to the Partners in
the following manner:
(A) First, if the Adjusted Capital Account
of an I-Unit is less than the Adjusted Capital Account of a
Common Unit, 99% to the Limited Partners holding Common Units
and Class B Units and 1% to the General Partner until the
Adjusted Capital Account of each Common Unit and Class B Unit
equals the Adjusted Capital Account of each I-Unit or, if the
Adjusted Capital Account of an I-Unit is greater than the
Adjusted Capital Account of a Common Unit, 99% to the Limited
Partners holding I-Units and 1% to the General Partner until
the Adjusted Capital Account of each I-Unit equals the
Adjusted Capital Account of each Common Unit;
(B) Second, 100% to the General Partner and
the Limited Partners holding I-Units, Common Units and Class B
Units in proportion to, and to the extent of, the positive
balances in their respective Adjusted Capital Accounts;
(C) Finally, 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
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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.
(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(f)(4) and shall be interpreted
consistently therewith.
(iii) Priority Allocations.
(A) 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 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 Units other than I-Units (on a per Unit
basis), then (1) each Limited Partner holding 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 Units exceeds the distribution (on a
per Unit basis) to the Limited Partner holding Units other
than I-Units receiving the smallest distribution and (bb) the
number of Units owned by the Limited Partners holding Units
receiving the greater distribution; and (2) the General
Partner shall be allocated gross income in an aggregate amount
equal to 1/99 of the sum of the amounts allocated in clause
(1) above.
After the application of Section
5.1(d)(iii)(A), all or any portion of the remaining items of
Partnership gross income or gain for the taxable period, if
any, shall be allocated 100% to the General Partner, until the
aggregate amount of such items allocated to the General
Partner pursuant to this paragraph 5.1(d)(iii)(B) for the
current taxable period and all previous taxable periods is
equal to the cumulative amount of all Incentive Distributions
made to the General Partner (or its assignee) from the Closing
Date to a date 45 days after the end of the current taxable
period.
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(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 General Partner
and the holders of Common Units and Class B Units in accordance with
the allocation of Net Income set forth in Section 5.1(a)(iii).
(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
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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) 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)(x)(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)(x)(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)(x)(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)(x)(A) among
the Partners in a manner that is likely to minimize such
economic distortions.
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:
(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
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otherwise provided in Section 5.2(b)(iv), 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 4.3(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)(iv), 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) Except as otherwise provided in Section
5.2(b)(iv), all other items of income, gain, loss and deduction shall
be allocated among the Partners in the same manner as their correlative
item of "book" gain or loss is allocated pursuant to Section 5.1.
(iv) Any items of income, gain, loss or deduction
otherwise allocable under Section 5.2(b)(i)(B), 5.2(b)(ii)(B) or
5.2(b)(iii) shall be subject to allocation by the General Partner in a
manner designed to eliminate, to the maximum extent possible, Book-Tax
Disparities in a Contributed Property or Adjusted Property otherwise
resulting from the application of the "ceiling" limitation (under
Section 704(c) of the Code or Section 704(c) principles) to the
allocations provided under Section 5.2(b)(i)(A) or 5.2(b)(ii)(A).
(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 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 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). If the General Partner determines that such
reporting position cannot reasonably be taken, the General Partner may adopt a
depreciation
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convention under which all purchasers acquiring Units in the same month would
receive depreciation, 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 convention 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.
(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 a transferred Partnership Interest of the General Partner or 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 identify 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.
5.3 REQUIREMENT AND CHARACTERIZATION OF DISTRIBUTIONS. (a) Within 45
days following the end of each calendar quarter, 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 Partners pursuant to Section
5.4 equals the aggregate amount of all Cash from Operations generated by the
Partnership since the Closing Date through the close of the immediately
preceding calendar quarter. Any remaining amounts of Available
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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.
(b) Notwithstanding the definitions of Available Cash and Cash
from Operations contained herein, disbursements (including, without limitation,
contributions to the Operating Partnerships or disbursements on behalf of the
Operating Partnerships) made or reserves established after the end of any
quarter shall be deemed to have been made or established, 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.
5.4 DISTRIBUTIONS OF CASH FROM OPERATIONS. An amount equal to 100% of
Available Cash with respect to any calendar quarter that is deemed to be Cash
from Operations pursuant to the provisions of Section 5.3 or 5.5 shall be
distributed in accordance with Section 5.7(a) as follows, except as otherwise
required by Section 4.1(c) in respect of additional Partnership Securities
issued pursuant thereto:
(a) First, 99% to all Limited Partners, Pro Rata, and 1% to
the General Partner until there has been distributed in respect of each Unit
Outstanding as of the last day of such quarter an amount equal to the Minimum
Quarterly Distribution;
(b) Second, 99% to all Limited Partners, Pro Rata, and 1% to
the General Partner until there has been distributed in respect of each Unit
Outstanding as of the last day of such quarter an amount equal to the excess of
the First Target Distribution over the Minimum Quarterly Distribution;
(c) Third, 85.8673% to all Limited Partners, Pro Rata, and
14.1327% to the General Partner until there has been distributed in respect of
each Unit Outstanding as of the last day of such quarter an amount equal to the
excess of the Second Target Distribution over the First Target Distribution: (d)
Fourth, 75.7653% to all Limited Partners, Pro Rata, and 24.2347% to the General
Partner until there has been distributed in respect of each Unit Outstanding as
of the last day of such quarter an amount equal to the excess of the Third
Target Distribution over the Second Target Distribution; and
(e) Thereafter, 50.5102% to all Limited Partners, Pro Rata,
and 49.4898% to the General Partner;
provided, however, 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, the
distributions of Available Cash that is deemed to be Cash from Operations with
respect to any quarter will be made solely in accordance with Section 5.4(e).
5.5 DISTRIBUTIONS OF CASH FROM INTERIM CAPITAL TRANSACTIONS. An amount
equal to 100% of Available Cash that constitutes Cash from Interim Capital
Transactions shall be
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distributed in accordance with Section 5.7(a), unless the provisions of Section
5.3 require otherwise, 99% to all Limited Partners, Pro Rata, and 1% 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 Cash from Interim Capital Transactions in an aggregate amount
equal to the Initial Unit Price. Thereafter, all Available Cash shall be
distributed as if it were Cash from Operations and shall be distributed in
accordance with Section 5.4.
5.6 ADJUSTMENT OF MINIMUM QUARTERLY DISTRIBUTION AND TARGET
DISTRIBUTION LEVELS. (a) 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 4.8;
provided, however, that no such adjustment shall be made as a result of any
distribution of I-Units or fractions of I-Units pursuant to Section 5.4 or 5.5.
In the event of a distribution of Available Cash 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.
(b) 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.
5.7 SPECIAL PROVISIONS RELATING TO UNITS. (a) Except for distributions
pursuant to Section 14.3(b), distributions to holders of I-Units pursuant to
Sections 5.4 and 5.5 will be made in additional I-Units or fractions of I-Units
in accordance with Section 5.7(b). Distributions to holders of Common Units,
Class B Units and the General Partner pursuant to Sections 5.4 and 5.5 will be
made in cash.
(b) A Holder of an I-Unit will receive distributions pursuant
to Sections 5.4 and 5.5 in additional I-Units or fractions of I-Units equal to
the Calculated Unit Amount. Each fractional I-Unit that is created as a result
of distributions pursuant to Sections 5.4 and 5.5 shall be equal to and
represented by a fraction that is calculated to six decimal places (without
rounding), and any calculation that would result in a fractional interest in
excess of one-millionth (1/1,000,000) of an I-Unit shall be disregarded without
payment or other consideration and shall not be accumulated.
(c) As used in this Agreement, (i) "Equivalent Non-Cash
Amount" means, per each I-Unit, an amount equivalent to the cash distribution
made on a Common Unit in accordance with Sections 5.4 and 5.5; (ii) "Calculated
Unit Amount" means a fraction of an I-Unit calculated per I-Unit by dividing the
Equivalent Non-Cash Amount by the Average Market Price; and (iii) "Average
Market Price" means the average of the daily Closing Prices per Listed Share for
the ten consecutive Trading Days prior to the date on which the Listed Shares
begin to trade ex-dividend, but not including that date. For purposes of this
Section 5.7(c), the "date on
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which the Listed Shares begin to trade ex-dividend" means the date on which
"ex-dividend" trading commences for a Share Distribution on the principal
National Securities Exchange on which the Listed Shares are listed or admitted
to trading.
(d) At any time during which there are any I-Units
Outstanding, the Partnership will not:
(i) make a distribution on a Common Unit other than
in cash, Common Units or a security that has in all material respects
the same rights and privileges as the Common Units;
(ii) except pursuant to Section 14.3(b), make a
distribution on an I-Unit other than in I-Units or a security that has
in all material respects the same rights and privileges as the I-Units;
(iii) allow a holder of Common Units to receive any
consideration other than cash or Common Units or a security that has in
all material respects the same rights and privileges as the Common
Units or allow a holder of I-Units to receive any consideration other
than I-Units or a security that has in all material respects the same
rights and privileges as the I-Units in a (A) merger in which the
Partnership is not the survivor, if the Limited Partners of the
Partnership immediately prior to the transaction own more than 50% of
the residual common equity securities of the survivor immediately after
the transaction; (B) merger in which the Partnership is the survivor,
if the Limited Partners of the Partnership immediately prior to the
transaction own more than 50% of the Partnership Interests of the
Limited Partners of the Partnership immediately after the transaction;
or (C) recapitalization, reorganization or similar transaction;
(iv) be a party to a merger in which it is not the
survivor, sell substantially all of the Partnership's assets to another
Person or enter into similar transactions if (A) the other person is to
be an Affiliate of KMI after the transaction; and (B) the transaction
will result in the occurrence of a Mandatory Purchase Event;
(v) make a tender offer for Common Units unless the
consideration (A) is exclusively cash; and (B) together with any cash
payable in respect of any tender offer by the Partnership for Common
Units concluded within the preceding 360 days and the aggregate amount
of any cash distributions to all holders of Common Units made within
the preceding 360 days, is less than 12% of the aggregate market value
of all Outstanding Units determined on the Trading Day immediately
preceding the commencement of the tender offer; or
(vi) issue any I-Units to any Person other than KMM.
(e) In the event of any (i) consolidation or merger of the
Partnership with or into another Person in accordance with Section 16.1 (other
than a consolidation or merger in which the Partnership is the Surviving
Business Entity and which does not result in any reclassification, conversion,
exchange or cancellation of Outstanding Common Units) or (ii) the sale or other
disposition to another Person of all or substantially all of the assets of the
Partnership (any of the foregoing, a "Transaction"), lawful provision shall be
made such that if the holders of Common Units receive cash in the Transaction,
except as provided in Section
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14.3(b), a distribution on each I-Unit will made in additional I-Units or
fractions of I-Units equal to the cash received on a Common Unit as a result of
the Transaction divided by the average of the daily Closing Prices per Listed
Share for the 10 consecutive Trading Days immediately prior to the effective
date of the Transaction.
ARTICLE I
MANAGEMENT AND OPERATION OF BUSINESS
6.1 MANAGEMENT. (a) Subject to Section 6.6(c), 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 to a general partner of a limited partnership
under applicable law or which are granted to the General Partner under any
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 government 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) 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
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 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
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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 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 the Assignees and each other Person who may
acquire an interest in Units hereby agrees that none of 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) shall 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 of any duty stated or implied by law or equity.
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.
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 Units or by other written instrument executed and delivered by all
of the Outstanding 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
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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 OLP-A, without the
approval of at least a majority of the Outstanding 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 at
least two-thirds of the Outstanding Units, the General Partner shall not, on
behalf of the Partnership, (i) consent to any amendment to the OLP-A Partnership
Agreement or, except as expressly permitted by Section 6.9(d), take any action
permitted to be taken by a partner of OLP-A, in either case, that would
adversely affect the Partnership as a partner of OLP-A or (ii) except as
permitted under Section 11.2 and 13.1, elect or cause the Partnership to elect a
successor general partner of OLP-A.
(c) Unless approved by the affirmative vote of at least a
majority of each class of Outstanding Units, including a majority of 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).
(d) At all times while serving as the general partner of the
Partnership, the General Partner shall not make any dividend or distribution on,
or repurchase any shares of, its stock or take any other action within its
control if the effect of such dividend, distribution, repurchase or other action
would be to reduce its net worth below an amount necessary to receive an Opinion
of Counsel that the Partnership will be treated as a partnership for federal
income tax purposes.
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, 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); provided, however, that the General Partner shall
not perform or be reimbursed for the "Services" to be performed on
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behalf of the Partnership by Enron and its Affiliates pursuant to the Omnibus
Agreement. 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) The General Partner in its sole discretion and without the
approval of the Limited Partners may propose and adopt on behalf of the
Partnership employee benefit plans (including, without limitation, plans
involving the issuance of Units), 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.
6.5 OUTSIDE ACTIVITIES.
(a) After the 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 the general partner of the Partnership and the
Operating Partnership and to undertake activities that are ancillary or related
thereto, and (ii) shall not enter into or conduct any business or incur any
debts or liabilities except in connection with or incidental to (A) its
performance of the activities required or authorized by the Operating
Partnership Agreement, this Agreement or the Omnibus Agreement or described in
or contemplated by the Registration Statement and (B) the acquisition, ownership
or disposition of partnership interests in the Partnership and the Operating
Partnership.
(b) Except as described in the Registration Statement, the
Omnibus Agreement or 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, those businesses described in or contemplated by
the Registration Statement. Without limitation of and subject to the foregoing
(but subject to the limitations set forth in the Omnibus Agreement), each
Indemnitee shall have the right to engage in the transportation of natural gas
liquids and in other 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,
business interests and activities in direct competition with the Partnership or
the Operating Partnership, and none of the same shall breach any duty to the
Partnership, the Operating Partnership or any Partners. 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 and, except as set forth in the Omnibus Agreement,
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 Closing
Date, and 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) Without limitation of Section 6.5(a) and 6.5(b), and
notwithstanding anything to the contrary in this Agreement, the competitive
activities of certain Indemnitees and the restrictions on the Partnership's
activities described in the Registration Statement and in the Omnibus Agreement
are hereby approved by all Partners, and it shall not be deemed to be a breach
of the General Partner's fiduciary duty for the General Partner to permit an
Indemnitee to engage in a business opportunity in preference to or to the
exclusion of the Partnership, if such activities are permitted by this
Agreement, the Operating Partnership Agreement or the Omnibus Agreement.
6.6 LOANS TO AND FROM THE GENERAL PARTNER; CONTRACTS WITH AFFILIATES.
(a) (i) 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 leading 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
Persons.
(c) The General Partner may itself, or may enter into an
agreement, including the Delegation of Control 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 service
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).
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(d) The Partnership may transfer assets to joint ventures,
other partnerships, corporations 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)
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.
(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 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 and in the Omnibus
Agreement are hereby approved by all Partners.
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 shall be indemnified
and held harmless by the Partnership, and all other Indemnitees may be
indemnified and held harmless by the Partnership, to the extent deemed advisable
by the General Partner, 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 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 the manner which such Indemnitee 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 Conveyance
Agreement (other than obligations incurred by the General Partner on behalf of
the Partnership or the Operating Partnerships). 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
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not be personally liable for such indemnification and shall have no obligation
to contribute or loan any monies or property to the Partnership to enable it to
effectuate such indemnification.
(b) To the fullest extent permitted by law, expenses
(including, 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 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, 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.
(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 or the Omnibus Agreement.
(h) The provisions of this Section 6.7 are for the benefit of
the Indemnities, their heirs, successors, assigns and administrators and shall
not be deemed to create any rights for the benefit of any other Persons.
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(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.
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. Notwithstanding the
preceding sentence, the General Partner shall be responsible for any misconduct
or negligence on the part of KMM in performing the Maximum Permitted Delegation.
(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.
6.9 RESOLUTION OF CONFLICTS OF INTEREST. (a) Unless otherwise expressly
provided in this Agreement, the Operating Partnership Agreement or the Omnibus
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, and Partner or any Assignee, on the
other hand, 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 Conflicts and Audit Committee
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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 or engineering practices or principles; and (D) such additional
factors as the General Partner (including such Conflicts and 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 Conflicts and Audit Committee) to consider the interest 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 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 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 the
General Partner to receive or increase the amount of Incentive Distributions.
(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.
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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 and a duly appointed attorney or attorneys-in-fact. 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 any 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.
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.
6.12 PURCHASE OR SALE OF UNITS. The General Partner may cause the
Partnership to purchase or otherwise acquire Units. As long as Units are held by
the Partnership or the
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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.
6.13 REGISTRATION RIGHTS OF KMGP AND ITS AFFILIATES. (a) If (i) KMGP or
any Affiliate (including, without limitation, for purposes of this Section 6.13,
any Person that is an Affiliate at the date hereof notwithstanding that it may
later cease to be an Affiliate) 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 KMGP or
any of its Affiliates, the Partnership shall file with the Securities and
Exchange 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, KMGP or its Affiliate requesting
registration is an Affiliate of the General Partner, the Conflicts and Audit
Committee in connection with Special Approval determines in good faith judgment
that a postponement of the requested registration for up to six months would be
in the best interest 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
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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.
(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 obligations
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 thereof (if used during the period the Partnership is
required to keep the registration 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 KMGP (and any of KMGP's 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
material and take all
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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.
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 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 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 in connection with any such dealing. In no event shall any
Person dealing with the General Partner 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
its representatives. Each and every certificate, document or other instrument
executed on behalf of the Partnership by the General Partner or its
representatives 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.
6.15 DELEGATION TO KMM (a) Pursuant to Section 6.6(c) of this Agreement
and in accordance with Section 17-403(c) of the Delaware Act, the General
Partner shall delegate to KMM, to the fullest extent permitted under this
Agreement and Delaware law, all of the General Partner's power and authority to
manage and control the business and affairs of the Partnership under the terms
and conditions of the Delegation of Control Agreement; provided, however, that
such delegation shall not cause the General Partner to cease to be the sole
general partner of the Partnership; and provided, further, that the General
Partner shall not be relieved of any of its responsibilities or obligations to
the Partnership or the Limited Partners as a result of such delegation. The
General Partner shall retain all of its Partnership Interest, Percentage
Interest, rights to Incentive Distributions, rights to allocations of Net Income
and Net Losses, rights to allocations of Net Termination Gains and Net
Termination Losses, and rights to distributions pursuant to Sections 5.3, 5.4,
5.5 and 14.3. The specific terms and conditions of the delegation to KMM are set
forth in the Delegation of Control Agreement.
(b) Notwithstanding anything to the contrary set forth in this
Agreement, until such date as the Maximum Permitted Delegation is terminated in
accordance with the Delegation of Control Agreement, the provisions of this
Agreement that apply to the management and control of the Partnership, including
Sections 6.4, 6.10 and 6.14, shall apply to KMM to the same extent as such
provisions apply to the General Partner.
(c) Notwithstanding anything to the contrary set forth in this
Agreement, the provisions of Section 6.7 of this Agreement shall apply to KMM
and any Person who is or was a manager, officer or director of KMM to the same
extent as such provisions apply to the General Partner and any Person who is or
was an officer or director of the General Partner.
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ARTICLE VII
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
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.
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 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.
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.
7.4 RETURN OF CAPITAL. No Limited Partner or Assignee shall be entitled
to the withdrawal or return of his 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 or in the Omnibus 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 Section 17-502(b) of the
Delaware Act.
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;
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(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, the Omnibus 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 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 is required by law or by agreements
with third parties to keep confidential (other than agreements with Affiliates
the primary purpose of which is to circumvent the obligations set forth in this
Section 7.5).
ARTICLE VIII
BOOKS, RECORDS, ACCOUNTING AND REPORTS
8.1 BOOKS, 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, punch cards, magnetic tape, photographs,
micrographics or any other information storage device, provided, that the books
and records so maintained are convertible into clearly legible written form
within a reasonable period of time. The books of the Partnership shall be
maintained, for financial reporting purposes, on an accrual basis in accordance
with generally accepted accounting principles.
8.2 FISCAL YEAR. The fiscal year of the Partnership shall be the
calendar year.
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
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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 calendar quarter except the last calendar 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
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 taxable year of the Partnership, 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 the calendar year.
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 trading 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.
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.
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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.
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.
9.6 ENTITY-LEVEL TAXATION. If legislation is enacted that causes the
Partnership to become treated as an association taxable as a corporation or
otherwise subjects the 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 effective federal corporate (or other
entity, as applicable) income tax rate for the fiscal 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. Such effective overall state and local
income tax rate shall be determined for the calendar year next preceding the
first calendar year during which the 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 had been
subject to such sate and local taxes during such preceding calendar year.
9.7 ENTITY-LEVEL ARREARAGE COLLECTIONS. If the Partnership or the
Operating Partnership is required by applicable law to pay, or any revenue
authority seizes any asset of the Partnership or the Operating Partnership with
respect to, 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 (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 or seized on behalf of, or withheld
with respect to, any Partner or Assignee shall constitute a distribution out of
Available Cash to such Partner or Assignee pursuant to Section 5.3; 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 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
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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, the General Partner shall be authorized
(but not required) 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 when such deficiencies arose,
from such Persons.
9.8 OPINIONS OF COUNSEL. Notwithstanding any other provision of this
Agreement, if the 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 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
10.1 CERTIFICATES. Upon the Partnership's issuance of 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 Certificate
shall be valid for any purpose until it has been countersigned by the Transfer
Agent.
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 Units and transfers
of such 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 the
Transfer Agent shall countersign and deliver, 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.
(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.
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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 the Transfer Agent shall countersign and deliver 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.
(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.
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 Person on the other hand,
such
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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
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 an
appropriate transaction by which the General Partner assigns its Partnership
Interest as General Partner to another Person or by which the holder of a Unit
assigns such Unit to another Person who is or becomes an Assignee, 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 all of the
issued and outstanding capital stock of the General Partner.
11.2 TRANSFER OF GENERAL PARTNER'S PARTNERSHIP INTEREST. (a) The
General Partner may transfer all, but not less than all, of its Partnership
Interest as the General Partner to a single transferee if, but only if, (i) a
majority of the Outstanding Units (excluding any Common Units and Class B Units
owned by the General Partner and its Affiliates and excluding the number of
I-Units corresponding to any Listed Shares owned by the General Partner and its
Affiliates) and a majority of the Outstanding I-Units voting as a separate class
(excluding the number of I-Units corresponding to any Listed Shares owned by the
General Partner and its Affiliates) approve of such transfer and of the
admission of such transferee as General Partner, (ii) the transferee agrees to
assume and be bound by the provisions of this Agreement and Operating
Partnership Agreement and (iii) 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 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.
(b) Neither Section 11.2(a) nor any other provision of this
Agreement shall be construed to prevent (and all Partners do hereby consent to)
(i) the transfer by the General Partner of all of its Partnership Interest to an
Affiliate or (ii) the transfer by the General Partner of all of its Partnership
Interest upon its 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 Partnership Interest so transferred are assumed by the transferee and the
transferee agrees to be bound by the provisions of this Agreement and the
Operating Partnership Agreement; provided, in either such case, that such
transferee furnishes to the Partnership an Opinion of Counsel that such merger,
consolidation, combination, transfer or
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assumption will not result in a loss of limited liability of any Limited Partner
or of any 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 be taxed as an entity for federal income tax purposes.
In the case of a transfer pursuant to this Section 11.2(b), 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.
11.3 TRANSFER OF UNITS. (a) Units may be transferred only in the manner
described in Section 10.2. The transfer of any 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) made the powers of attorney set forth in this Agreement and
(v) given the consents and approvals and made the waivers contained in this
Agreement.
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 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 as an association taxable as a corporation or
otherwise subject the Partnership to entity-level taxation for federal income
tax purposes or (c) affect the Partnership's existence or qualification as a
limited partnership under the Delaware Act.
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, provides for the 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
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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 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).
(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 12.1 the General Partner shall cease
to be deemed to be the Limited Partner in respect of the Non-citizen Assignee's
Units.
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
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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.
(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 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.
ARTICLE XII
ADMISSION OF PARTNERS
12.1 ADMISSION OF SUBSTITUTED LIMITED PARTNERS. By transfer of a 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 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 (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
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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.
12.2 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's Partnership 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's Partnership 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. Any such successor shall carry on the business of the Partnership and
Operating Partnership without dissolution. In each case, the admission shall be
subject to the successor General Partner executing and delivering to the
Partnership an acceptance of all of the terms and conditions of this Agreement
and such other documents or instruments as may be required to effect the
admission.
12.3 ADMISSION OF ADDITIONAL LIMITED PARTNERS. (a) A Person (other than
the General 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 instructions 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
12.3, 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 on the books and records of the Partnership, following the
consent of the General Partner to such admission.
12.4 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 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.
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ARTICLE XIII
WITHDRAWAL OR REMOVAL OF PARTNERS
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 OLP-A);
(ii) the General Partner transfers all of its rights
as General Partner 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
(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.
In no event shall the Maximum Permitted Delegation pursuant to the
terms and conditions of the Delegation of Control Agreement and this Agreement
be deemed an Event of Withdrawal.
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
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following circumstances: (i) at any time during the period prior to January 1,
2003 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 Limited Partners holding at least a majority of the Outstanding Units
(excluding for purposes of such determination Common Units and Class B Units
owned by the General Partner and its Affiliates and excluding the number of
I-Units corresponding to any Listed Shares owned by the General Partner and its
Affiliates) and a majority of the Outstanding I-Units voting as a separate class
(excluding for purposes of such determination the number of I-Units
corresponding to any Listed Shares 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 on or after
January 1, 2003, 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 aggregate number of Outstanding Units (other than I-Units) and Listed
Shares on a combined basis. 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 Units
(excluding for purposes of such determination Units owned by the General Partner
and its Affiliates) may, prior to the effective date of such withdrawal, elect a
successor General Partner. The Person so elected as successor General Partner
shall automatically become the successor general partner of the Operating
Partnership, as provided in 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 such successor General Partner shall be subject to the
provisions of Section 12.2.
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 Units (excluding for purposes of such determination Common Units
and Class B Units owned by the General Partner and its Affiliates and excluding
the number of I-Units corresponding to any Listed Shares owned by the General
Partner and its Affiliates). Any such action by such Limited Partners for
removal of the General Partner must also provide for the election and succession
of a new General Partner. Such removal shall be effective immediately following
the admission of the 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. The Person so elected as
successor General Partner shall automatically become the successor general
partner of
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the Operating Partnership, as provided in the Operating Partnership Agreement.
The right of the Limited Partners holding Outstanding 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 such successor General Partner shall be subject to the provisions
of Section 12.2.
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 Limited Partners under circumstances where Cause does not exist,
the Departing Partner shall, at its option exercisable prior to the effective
date of the departure of such Departing Partner, promptly receive from its
successor in exchange for its Partnership Interest as General Partner an amount
in cash equal to the fair market value of the Departing Partner's Partnership
Interest as General Partner, 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, its successor shall have the
option described in the immediately preceding sentence, and the Departing
Partner shall not have such option. In either case, if the successor acquires
the Departing Partner's Partnership Interest as the general partner, such
successor General Partner must also acquire at such time the general partner
interest of such Departing Partner as general partner of the Operating
Partnership, for an amount in cash equal to the fair market value of such
interest, determined as of the effective date of its departure. 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 Partnership Interest as the General Partner
and Partnership income, gain, loss, deduction and credit will be prorated and
allocated as set forth in Section 5.2(g).
For purposes of this Section 13.3(a), the fair market value of the
Departing Partner's Partnership Interest as the general partner of the
Partnership herein and the partnership interest of such Departing Partner as the
general partner of the Operating Partnership (collectively, the "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
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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 acquired 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 Partnership Interest to
Common Units shall be characterized as if the General Partner contributed its
Partnership Interest to the Partnership in exchange for the newly-issued Common
Units.
(c) If 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 4.3(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, each 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.
In addition, such successor General Partner shall cause this Agreement to be
amended to reflect that, from and after the date of such successor General
Partner's admission, the successor General Partner's interest in all Partnership
distributions and allocations shall be 1%, and that of the holders of
Outstanding Units shall be 99%.
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.
ARTICLE XIV
DISSOLUTION AND LIQUIDATION
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 any
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 12.2;
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(c) an election to dissolve the Partnership by the General
Partner that is approved by at least a majority of the Outstanding Units (and
all Limited Partners 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.
14.2 CONTINUATION OF THE BUSINESS OF THE PARTNERSHIP AFTER DISSOLUTION.
Upon (a) dissolution of the Partnership caused by the withdrawal or removal of
the General Partner and following a failure of all Partners, within 90 days
after the withdrawal or removal of the General Partner, to agree to continue the
business of the Partnership and appoint a successor General Partner as provided
in Section 13.1 or 13.2, then within an additional 90 days 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 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 a general partner a Person approved by a majority of the
Outstanding Units. Upon any such election by a majority of the Outstanding
Units, all Partners shall be bound thereby and shall be deemed to have approved
same. Unless such an election is made within the applicable time period as set
forth above, the Partnership shall conduct only activities necessary to wind up
its affairs. If such an election is so made, then:
(i) the reconstituted Partnership shall continue
until the end of the term set forth in Section 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 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.
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,
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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 a majority of the
Outstanding 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 a majority of the Outstanding 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 a majority of the Outstanding 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:
(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 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).
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
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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.
Notwithstanding the above, the Liquidator may not make distributions in kind
unless all of the Listed Shares are owned by the General Partner and its
Affiliates.
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, 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.
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.
14.7 RETURN OF CAPITAL. 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.
14.8 NO CAPITAL ACCOUNT RESTORATION. No Partner shall have any
obligation to restore any negative balance in its Capital Account upon
liquidation of the Partnership.
14.9 WAIVER OF PARTITION. Each Partner hereby waives any right to
partition of the Partnership property.
ARTICLE XV
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE
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 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;
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(c) a change that, in the sole discretion of the General
Partner, is reasonable and 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 the Partnership will not be treated as an association taxable as a
corporation or otherwise taxed as an entity for federal income tax purposes;
(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 or (iii) that is required to effect the intent of the provisions of
this Agreement or is otherwise contemplated by this Agreement;
(e) 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;
(f) subject to the terms of Section 4.1, an amendment that the
General Partner determines in its sole discretion to be necessary or appropriate
in connection with the authorization for issuance of any class or series of
Partnership Securities pursuant to Section 4.1;
(g) any amendment expressly permitted in this Agreement to be
made by the General Partner acting alone;
(h) an amendment effected, necessitated or contemplated by a
Merger Agreement approved in accordance with Section 16.3; or
(i) any other amendments substantially similar to the
foregoing.
15.2 AMENDMENT PROCEDURES. Except as provided in Sections 15.1 and
15.3, 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. Each such proposal shall contain the
text of the proposed amendment. If an amendment is proposed, the General Partner
shall seek the written approval of the requisite percentage of Outstanding Units
or call a meeting of the Limited Partners to consider and vote on such proposed
amendment. A proposed amendment shall be effective upon its approval by at least
two-thirds of the Outstanding Units unless a greater or different percentage is
required under this Agreement; provided that if the effect of any amendment
would have a material adverse effect on the rights or preferences of any class
of Outstanding Units in relation to any other class of
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Outstanding Units, the affirmative vote of the holders of at least a two-thirds
of the Outstanding Units of the class so affected shall be required to adopt
such amendment (excluding for purposes of such determination, in the case of a
vote of the holders of the I-Units, the number of I-Units corresponding to the
Listed Shares owned by the General Partner and its Affiliates). The General
Partner shall notify all Record Holders upon final adoption of any proposed
amendment.
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, the General Partner may amend the Partnership
Agreement without the approval of holders of Outstanding Units, except that 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 two-thirds of the Outstanding Units of
the class affected.
(d) Notwithstanding any other provision of this Agreement,
except for amendments pursuant to Section 6.3 or 15.1, no amendments shall
become effective without the approval of at least 95% of the Outstanding 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 not less than 95% of the Outstanding Units.
15.4 MEETINGS. All acts of Limited Partners to be taken hereunder 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 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
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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.
15.5 NOTICE OF 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 17.1 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.
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.
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.
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, each of the Limited Partners entitled to
vote, present in person or by proxy, signs 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.
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15.9 QUORUM. Two-thirds of the Outstanding Units of the class 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 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 represented either in
person or by proxy, but no other business may be transacted, except as provided
in Section 15.7.
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, in
either case including, without limitation, a Partner or a director or officer of
the General Partner. 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.
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 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
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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.
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.
ARTICLE XVI
MERGER
16.1 AUTHORITY. The Partnership may merge or consolidate with one or
more corporations, business trusts or associations, real estate investment
trusts, common law trusts or unincorporated businesses, including, 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.
16.2 PROCEDURE FOR MERGER OR CONSOLIDATION. Merger or consolidation of
the Partnership pursuant to this Article 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;
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(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 (1) 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
interest are to receive in exchange for, or upon conversion of, their 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 limited partnership, corporation, trust or other entity
(other than the Surviving Business Entity), or evidences thereof, are to be
delivered;
(e) A statement of any changes in the constituent documents or
the adoption of new constituent documents (the articles or certificate of
incorporation, articles of trust, declaration of trust, certificate or agreement
of limited partnership 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, it 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.
16.3 APPROVAL BY LIMITED PARTNERS 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 Limited
Partners 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 at least a majority of the Outstanding 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
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.
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(c) After such approval by vote or consent of the Limited
Partners, 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.
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.
16.5 EFFECT OF MERGER. (a) Upon the effective date 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 interest 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
17.1 RIGHT TO ACQUIRE COMMON UNITS AND LISTED SHARES. (a)
Notwithstanding any other provision of this Agreement, if at any time not more
than 20% of the aggregate number of Listed Shares then outstanding plus the
aggregate number of the Common Units then Outstanding are held by Persons other
than the General Partner and its Affiliates, the General Partner shall then 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 Common Units held by Persons other
than the General Partner and its Affiliates, at the Optional Purchase Price, but
only if KMI elects to purchase all, but not less than all, of the outstanding
Listed Shares that are not held by KMI and its Affiliates pursuant to Section 4
of the Purchase Provisions. As used in this Agreement, "Optional Purchase Price"
means a price that is equal to the greatest of (A) the Current Market Price for
the Common Units as of the date five days prior to the date that the notice
described in Section 17.1(b) is mailed, (B) the highest price
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paid by the General Partner or any of its Affiliates for a Common Unit purchased
during the 90 calendar day period preceding the date that the notice described
in Section 17.1(b) is mailed, (C) the Current Market Price for the Listed Shares
as of the date five days prior to the date that the notice described in Section
17.1(b) is mailed, and (D) the highest price paid by the General Partner or any
of its Affiliates for a Listed Share (other than pursuant to the Exchange
Provisions) purchased during the 90 calendar day period preceding the date that
the notice described in Section 17.1(b) is mailed. To the extent that the price
paid for Listed Shares or Common Units in clauses (B) or (D) is paid in
securities, the value of such securities shall be the Closing Price for such
securities on the day the purchase of the Listed Shares or Common Units is
effected. To the extent that the price paid for Listed Shares or Common Units in
clauses (B) or (D) is paid other than in cash or securities, the value of such
other consideration (and therefore the price paid for such Listed Shares or
Common Units) shall be determined in good faith by the Board of Directors of the
General Partner. As used in this Agreement, (i) "Current Market Price" as of any
date of any class of Units or any other security means the average of the daily
Closing Prices (as hereinafter defined) per Unit of such class or of such other
security for the 20 consecutive Trading Days (as hereinafter defined)
immediately prior to such date; (ii) "Closing Price" for a security on any day
means (1) 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 composite
transaction reporting system with respect to securities listed on the principal
National Securities Exchange on which the Units of such class or such other
securities are listed or admitted to trading, (2) or if the Units of such class
or such other securities are not listed or admitted to trading on any National
Securities Exchange on that day, the last quoted price on such day or, if no
price is quoted, the average of the high bid and low asked prices on such day in
the over-the-counter market, each as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or such other system then in
use, or (3) if on any such day the Units of such class or such other securities
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 or such other securities selected by the Board
of Directors of the General Partner, or (4) if on any such day no market maker
is making a market in the Units of such class or such other securities, the fair
value of such Units or such other securities on such day as determined
reasonably and in good faith by the Board of Directors of the General Partner;
and (iii) "Trading Day" means a day on which the principal National Securities
Exchange on which the Units of any class or such other securities are listed or
admitted to trading is open for the transaction of business or, if Units of a
class or such other securities 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. Notwithstanding anything herein to the contrary, the
Current Market Price of each Class B Unit shall be deemed to be the same as the
Current Market Price of one Common Unit.
(b) If the General Partner, any Affiliate of the General
Partner or the Partnership elects to exercise either the right to purchase
Common 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 in 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
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(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 Common Units, upon surrender of
Certificates representing such Common 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 Common Units
are listed or admitted to trading. Any such Notice of Election to Purchase
mailed to a Record Holder of Common 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 the Common 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 ten 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 Common 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 Common 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 Common
Units therefor, without interest, upon surrender to the Transfer Agent of the
Certificates representing such Common Units, and such Common 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 Common Units (including, without limitation, all rights as
owner of such Common 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 either 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.
ARTICLE XVIII
GENERAL PROVISIONS
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,
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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.
18.2 REFERENCES. Except as specifically provided otherwise, references
to "Articles" and "Sections" are to Articles and Sections of this Agreement.
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.
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.
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.
18.6 INTEGRATION. This Agreement constitutes the entire agreement among
parties hereto pertaining to the subject matter hereof and supersedes all prior
agreements and understandings pertaining thereto.
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.
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.
18.9 COUNTERPARTS. This Agreement may be executed in counterparts, all
of which together shall constitute an agreement binding on all 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.
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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.
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.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective as of May 18, 2001.
GENERAL PARTNER:
KINDER ▇▇▇▇▇▇ ▇.▇., INC.
By: /s/ C. Park Shaper
-------------------------------
C. Park Shaper
Vice President, Treasurer and
Chief Financial Officer
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: Kinder ▇▇▇▇▇▇ ▇.▇., Inc.,
General Partner, as
attorney-in-fact for all Limited
Partners pursuant to the Power of
Attorney granted pursuant to
Section 1.4.
/s/ C. Park Shaper
-------------------------------
C. Park Shaper
Vice President, Treasurer and
Chief Financial Officer
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EXHIBIT A
TO THE THIRD AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF
▇▇▇▇▇▇ ▇▇▇▇▇▇ ENERGY PARTNERS, L.P.
CERTIFICATE EVIDENCING COMMON UNITS
REPRESENTING LIMITED PARTNER INTERESTS IN
▇▇▇▇▇▇ ▇▇▇▇▇▇ ENERGY PARTNERS, L.P.
No.______ ________ Common Units
KINDER ▇▇▇▇▇▇ ▇.▇., INC., a Delaware corporation, as the General
Partner of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ENERGY 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
Third Amended and Restated Agreement of Limited Partnership of ▇▇▇▇▇▇ ▇▇▇▇▇▇
ENERGY 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 ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇. 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 or a Substituted
Limited Partner, as applicable, 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) appointed the General Partner and, if a Liquidator shall be appointed, the
Liquidator of the Partnership as the Holder's attorney to execute, swear to,
acknowledge and file any document, including, without limitation, the
Partnership Agreement and any amendment thereto and the Certificate of Limited
Partnership of the Partnership and any amendment thereto, necessary or
appropriate for the Holder's admission as a Limited Partner or a Substituted
Limited Partner, as applicable, in the Partnership and as a party to the
Partnership Agreement, (iv) given the powers of attorney provided for in the
Partnership Agreement and (v) made the waivers and given the consents and
approvals contained in the Partnership Agreement.
Exhibit A Page 1
89
This Certificate shall not be valid for any purpose unless it has been
countersigned and registered by the Transfer Agent and Registrar.
Dated:
-------------------------
KINDER ▇▇▇▇▇▇ ▇.▇., INC.,
as General Partner
By:
------------------------------
Countersigned and Registered by: President
, By:
---------------------------------- ------------------------------
as Transfer Agent and Registrar Secretary
By:
-------------------------------
Authorized Signature
Exhibit A Page 2
90
[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 (Cust) (Minor)
JT TEN-- as joint tenants with right of under Uniform Gifts to
survivorship and not as Act......................
tenants in common (State)
Additional abbreviations, though not in the above list, may also be
used.
ASSIGNMENT OF COMMON UNITS
IN
▇▇▇▇▇▇ ▇▇▇▇▇▇ ENERGY PARTNERS, L.P.
IMPORTANT NOTICE REGARDING INVESTOR
RESPONSIBILITIES DUE TO TAX SHELTER STATUS OF ▇▇▇▇▇▇
▇▇▇▇▇▇ ENERGY PARTNERS, L.P.
You have acquired an interest in ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy Partners, L.P.,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, whose taxpayer
identification number is ▇▇-▇▇▇▇▇▇▇. The Internal Revenue Service has issued
▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy Partners, L.P. the following tax shelter registration
number: 9228900496.
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 ▇▇▇▇▇▇ ▇▇▇▇▇▇ ENERGY PARTNERS, L.P.
You must report the registration number as well as the name and
taxpayer identification number of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇ ENERGY PARTNERS, L.P.
If you transfer your interest in ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy Partners, L.P. If you do
not want to keep such a list, you must (1) send the information specified above
to the General Partner, who 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.
Exhibit A Page 3
91
FOR VALUE RECEIVED,___________________________________ hereby assigns,
conveys, sells and transfers unto ______________________________________________
---------------------------------- -------------------------------------
(Please print or typewrite name (Please insert Social Security or
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 ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy 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 DEALERS, (Signature)
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.
--------------------------------------------------------------
Exhibit A Page 4
92
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 Third
Amended and Restated Agreement of Limited Partnership of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy
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) appoints the General
Partner and, if a Liquidator shall be appointed, the Liquidator of the
Partnership as the Assignee's attorney to execute, swear to, acknowledge and
file any document, including, without limitation, the Partnership Agreement and
any amendment thereto and the Certificate of Limited Partnership of the
Partnership and any amendment thereto, necessary or appropriate for the
Assignee's admission as a Substituted Limited Partner and as a party to the
Partnership Agreement, (d) gives the powers of attorney provided for in the
Partnership Agreement and (e) 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.
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).
Exhibit A Page 5
93
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 foreign
(Name of Interest-Holder)
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 sixty (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.
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.
Exhibit A Page 6
94
EXHIBIT B
TO THE THIRD AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF
▇▇▇▇▇▇ ▇▇▇▇▇▇ ENERGY PARTNERS, L.P.
CERTIFICATE EVIDENCING CLASS B UNITS
REPRESENTING LIMITED PARTNER INTERESTS IN
▇▇▇▇▇▇ ▇▇▇▇▇▇ ENERGY PARTNERS, L.P.
No.______ ________ Class B Units
KINDER ▇▇▇▇▇▇ ▇.▇., INC., a Delaware corporation, as the General
Partner of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ENERGY PARTNERS, L.P., a Delaware limited partnership
(the "Partnership"), hereby certifies that __________________________ (the
"Holder") is the registered owner of _____ Class B Units representing limited
partner interests in the Partnership (the "Class B 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 Class B Units represented by this
Certificate. The rights, preferences and limitations of the Class B Units are
set forth in, and this Certificate and the Class B Units represented hereby are
issued and shall in all respects be subject to the terms and provisions of, the
Third Amended and Restated Agreement of Limited Partnership of ▇▇▇▇▇▇ ▇▇▇▇▇▇
ENERGY 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 ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇. 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 or a Substituted
Limited Partner, as applicable, 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) appointed the General Partner and, if a Liquidator shall be appointed, the
Liquidator of the Partnership as the Holder's attorney to execute, swear to,
acknowledge and file any document, including, without limitation, the
Partnership Agreement and any amendment thereto and the Certificate of Limited
Partnership of the Partnership and any amendment thereto, necessary or
appropriate for the Holder's admission as a Limited Partner or a Substituted
Limited Partner, as applicable, in the Partnership and as a party to the
Partnership Agreement, (iv) given the powers of attorney provided for in the
Partnership Agreement and (v) made the waivers and given the consents and
approvals contained in the Partnership Agreement.
Exhibit B Page 1
95
This Certificate shall not be valid for any purpose unless it has been
countersigned and registered by the Transfer Agent and Registrar.
Dated:
--------------------
KINDER ▇▇▇▇▇▇ ▇.▇., INC.,
as General Partner
By:
-----------------------------
Countersigned and Registered by: President
, By:
----------------------------------- -----------------------------
as Transfer Agent and Registrar Secretary
By:
--------------------------------
Authorized Signature
Exhibit B Page 2
96
[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 (Cust) (Minor)
JT TEN-- as joint tenants with right of under Uniform Gifts to
survivorship and not as Act......................
tenants in common (State)
Additional abbreviations, though not in the above list, may also be
used.
ASSIGNMENT OF CLASS B UNITS
IN
▇▇▇▇▇▇ ▇▇▇▇▇▇ ENERGY PARTNERS, L.P.
IMPORTANT NOTICE REGARDING INVESTOR
RESPONSIBILITIES DUE TO TAX SHELTER STATUS OF ▇▇▇▇▇▇
▇▇▇▇▇▇ ENERGY PARTNERS, L.P.
You have acquired an interest in ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy Partners, L.P.,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, whose taxpayer
identification number is ▇▇-▇▇▇▇▇▇▇. The Internal Revenue Service has issued
▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy Partners, L.P. the following tax shelter registration
number: 9228900496.
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 ▇▇▇▇▇▇ ▇▇▇▇▇▇ ENERGY PARTNERS, L.P.
You must report the registration number as well as the name and
taxpayer identification number of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇ ENERGY PARTNERS, L.P.
If you transfer your interest in ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy Partners, L.P. If you do
not want to keep such a list, you must (1) send the information specified above
to the General Partner, who 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.
Exhibit B Page 3
97
FOR VALUE RECEIVED,_____________________________ hereby assigns,
conveys, sells and transfers unto ______________________________________________
----------------------------------- -------------------------------------
(Please print or typewrite name (Please insert Social Security or
and address of Assignee) other identifying number of Assignee)
_____________________________________ Class B 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy 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 DEALERS, (Signature)
INC. OR BY A COMMERCIAL BANK OR
TRUST COMPANY ----------------------------------------
(Signature)
SIGNATURE(S) GUARANTEED
No transfer of the Class B Units evidenced hereby will be registered on
the books of the Partnership, unless the Certificate evidencing the Class B
Units to be transferred is surrendered for registration or transfer and an
Application for Transfer of Class B 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 Class B
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 Class B Units.
--------------------------------------------------------------
Exhibit B Page 4
98
APPLICATION FOR TRANSFER OF CLASS B UNITS
The undersigned ("Assignee") hereby applies for transfer to the name of
the Assignee of the Class B 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 Third
Amended and Restated Agreement of Limited Partnership of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy
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) appoints the General
Partner and, if a Liquidator shall be appointed, the Liquidator of the
Partnership as the Assignee's attorney to execute, swear to, acknowledge and
file any document, including, without limitation, the Partnership Agreement and
any amendment thereto and the Certificate of Limited Partnership of the
Partnership and any amendment thereto, necessary or appropriate for the
Assignee's admission as a Substituted Limited Partner and as a party to the
Partnership Agreement, (d) gives the powers of attorney provided for in the
Partnership Agreement and (e) 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.
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).
Exhibit B Page 5
99
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 foreign
(Name of Interest-Holder)
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 sixty (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.
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 Class B Units shall be made
to the best of the Assignee's knowledge.
Exhibit B Page 6
100
EXHIBIT C
TO THE THIRD AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF
▇▇▇▇▇▇ ▇▇▇▇▇▇ ENERGY PARTNERS, L.P.
CERTIFICATE EVIDENCING I-UNITS
REPRESENTING LIMITED PARTNER INTERESTS IN
▇▇▇▇▇▇ ▇▇▇▇▇▇ ENERGY PARTNERS, L.P.
No.______ ________ I-Units
KINDER ▇▇▇▇▇▇ ▇.▇., INC., a Delaware corporation, as the General
Partner of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ENERGY PARTNERS, L.P., a Delaware limited partnership
(the "Partnership"), hereby certifies that __________________________ (the
"Holder") is the registered owner of _____ I-Units representing limited partner
interests in the Partnership (the "I-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 I-Units represented by this Certificate. The rights,
preferences and limitations of the I-Units are set forth in, and this
Certificate and the I-Units represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Third Amended and
Restated Agreement of Limited Partnership of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ENERGY 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 ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇. 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 or a Substituted
Limited Partner, as applicable, 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) appointed the General Partner and, if a Liquidator shall be appointed, the
Liquidator of the Partnership as the Holder's attorney to execute, swear to,
acknowledge and file any document, including, without limitation, the
Partnership Agreement and any amendment thereto and the Certificate of Limited
Partnership of the Partnership and any amendment thereto, necessary or
appropriate for the Holder's admission as a Limited Partner or a Substituted
Limited Partner, as applicable, in the Partnership and as a party to the
Partnership Agreement, (iv) given the powers of attorney provided for in the
Partnership Agreement and (v) made the waivers and given the consents and
approvals contained in the Partnership Agreement.
Exhibit C Page 1
101
This Certificate shall not be valid for any purpose unless it has been
countersigned and registered by the Transfer Agent and Registrar.
Dated:
---------------------
KINDER ▇▇▇▇▇▇ ▇.▇., INC.,
as General Partner
By:
-----------------------------
Countersigned and Registered by: President
, By:
----------------------------------- -----------------------------
as Transfer Agent and Registrar Secretary
By:
--------------------------------
Authorized Signature
Exhibit C Page 2
102
[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 (Cust) (Minor)
JT TEN-- as joint tenants with right of under Uniform Gifts to
survivorship and not as Act......................
tenants in common (State)
Additional abbreviations, though not in the above list, may also be
used.
ASSIGNMENT OF I-UNITS
IN
▇▇▇▇▇▇ ▇▇▇▇▇▇ ENERGY PARTNERS, L.P.
IMPORTANT NOTICE REGARDING INVESTOR
RESPONSIBILITIES DUE TO TAX SHELTER STATUS OF ▇▇▇▇▇▇
▇▇▇▇▇▇ ENERGY PARTNERS, L.P.
You have acquired an interest in ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy Partners, L.P.,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, whose taxpayer
identification number is ▇▇-▇▇▇▇▇▇▇. The Internal Revenue Service has issued
▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy Partners, L.P. the following tax shelter registration
number: 9228900496.
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 ▇▇▇▇▇▇ ▇▇▇▇▇▇ ENERGY PARTNERS, L.P.
You must report the registration number as well as the name and
taxpayer identification number of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇ ENERGY PARTNERS, L.P.
If you transfer your interest in ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy Partners, L.P. If you do
not want to keep such a list, you must (1) send the information specified above
to the General Partner, who 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.
Exhibit C Page 3
103
FOR VALUE RECEIVED,_____________________________ hereby assigns,
conveys, sells and transfers unto ______________________________________________
---------------------------------- -------------------------------------
(Please print or typewrite name (Please insert Social Security or
and address of Assignee) other identifying number of Assignee)
_________________________________________ I-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 ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy 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 DEALERS, (Signature)
INC. OR BY A COMMERCIAL BANK OR
TRUST COMPANY -------------------------------------------
(Signature)
SIGNATURE(S) GUARANTEED
No transfer of the I-Units evidenced hereby will be registered on the
books of the Partnership, unless the Certificate evidencing the I-Units to be
transferred is surrendered for registration or transfer and an Application for
Transfer of I-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 I-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 I-Units.
--------------------------------------------------------------
Exhibit C Page 4
104
APPLICATION FOR TRANSFER OF I-UNITS
The undersigned ("Assignee") hereby applies for transfer to the name of
the Assignee of the I-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 Third
Amended and Restated Agreement of Limited Partnership of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Energy
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) appoints the General
Partner and, if a Liquidator shall be appointed, the Liquidator of the
Partnership as the Assignee's attorney to execute, swear to, acknowledge and
file any document, including, without limitation, the Partnership Agreement and
any amendment thereto and the Certificate of Limited Partnership of the
Partnership and any amendment thereto, necessary or appropriate for the
Assignee's admission as a Substituted Limited Partner and as a party to the
Partnership Agreement, (d) gives the powers of attorney provided for in the
Partnership Agreement and (e) 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.
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).
Exhibit C Page 5
105
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 foreign
(Name of Interest-Holder)
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 sixty (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.
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 I-Units shall be made to
the best of the Assignee's knowledge.
Exhibit C Page 6