Exhibit 4.1
Execution Copy
THIRD AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
GENESIS ENERGY, L.P.
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
1.1 Definitions 1
1.2 Construction 11
ARTICLE II
Organization
2.1 Continuation of Existence 11
2.2 Name 11
2.3 Registered Office; Registered Agent; Principal Office; Other Offices 11
2.4 Purpose and Business 11
2.5 Powers 12
2.6 Power of Attorney 12
2.7 Term 13
2.8 Title to Partnership Assets 13
ARTICLE III
Rights of Limited Partners
3.1 Limitation of Liability 13
3.2 Management of Business 14
3.3 Outside Activities of the Limited Partners 14
3.4 Rights of Limited Partners 14
ARTICLE IV
Certificates; Record Holders; Transfer of
Partnership Interests; Redemption of
Partnership Interests
4.1 Certificates 15
4.2 Mutilated, Destroyed, Lost or Stolen Certificates 15
4.3 Record Holders 16
4.4 Transfer Generally 16
4.5 Registration and Transfer of Limited Partner Interests 16
4.6 Transfer of a General Partner's General Partner Interest 17
4.7 Restrictions on Transfers 17
4.8 Citizenship Certificates; Non-citizen Assignees 18
4.9 Redemption of Partnership Interests of Non-citizen Assignees 18
ARTICLE V
Capital Contributions and Issuance of
Partnership Interests
5.1 Previous Capital Contributions 19
5.2 Additional Contributions by General Partner 19
5.3 Interest and Withdrawal 20
5.4 Capital Accounts 20
5.5 Issuances of Additional Partnership Securities 22
5.6 Limited Preemptive Right 22
5.7 Splits and Combination 23
5.8 Fully Paid and Non-Assessable Nature of Limited Partner Interests 23
ARTICLE VI
Allocations and Distributions
6.1 Allocations for Capital Account Purposes 23
6.2 Allocations for Tax Purposes 26
6.3 Distributions to Record Holders 27
ARTICLE VII
Management and Operation of Business
7.1 Management 28
7.2 Certificate of Limited Partnership 30
7.3 Restrictions on General Partner's Authority 30
7.4 Reimbursement of the General Partner 30
7.5 Outside Activities 31
7.6 Loans from the General Partner; Loans or Contributions from the
Partnership; Contracts with Affiliates; Certain Restrictions on the
General Partner 32
7.7 Indemnification 33
7.8 Liability of Indemnitees 34
7.9 Resolution of Conflicts of Interest 35
7.10 Other Matters Concerning the General Partner 36
7.11 Purchase or Sale of Partnership Securities 36
7.12 Registration Rights of the General Partner and its Affiliates 37
7.13 Reliance by Third Parties 38
ARTICLE VIII
Books, Records, Accounting and Reports
8.1 Records and Accounting 39
8.2 Fiscal Year 39
8.3 Reports 39
ARTICLE IX
Tax Matters
9.1 Tax Returns and Information 39
9.2 Tax Elections 39
9.3 Tax Controversies 40
9.4 Withholding 40
ARTICLE X
Admission of Partners
10.1 Admission of Substituted Limited Partner 40
10.2 Admission of Successor General Partner 41
10.3 Admission of Additional Limited Partners 41
10.4 Amendment of Agreement and Certificate of Limited Partnership 41
ARTICLE XI
Withdrawal or Removal of Partners
11.1 Withdrawal of the General Partner 41
11.2 Removal of the General Partner 43
11.3 Interest of Departing Partner and Successor General Partner 43
11.4 Withdrawal of Limited Partners 44
ARTICLE XII
Dissolution and Liquidation
12.1 Dissolution 44
12.2 Continuation of the Business of the Partnership After Dissolution 45
12.3 Liquidator 45
12.4 Liquidation 46
12.5 Cancellation of Certificate of Limited Partnership 46
12.6 Return of Contributions 46
12.7 Waiver of Partition 46
12.8 Capital Account Restoration 46
ARTICLE XIII
Amendment of Partnership Agreement; Meetings; Record Date
13.1 Amendment to be Adopted Solely by the General Partner 47
13.2 Amendment Procedures 48
13.3 Amendment Requirements 48
13.4 Special Meetings 49
13.5 Notice of a Meeting 49
13.6 Record Date 49
13.7 Adjournment 49
13.8 Waiver of Notice; Approval of Meeting; Approval of Minutes 49
13.9 Quorum 50
13.10 Conduct of a Meeting 50
13.11 Action Without a Meeting 50
13.12 Voting and Other Rights 51
ARTICLE XIV
Merger
14.1 Authority 51
14.2 Procedure for Merger or Consolidation 51
14.3 Approval by Limited Partners of Merger or Consolidation 52
14.4 Certificate of Merger 53
14.5 Effect of Merger 53
ARTICLE XV
Right to Acquire Limited Partner Interests
15.1 Right to Acquire Limited Partner Interests 53
ARTICLE XVI
General Provisions
16.1 Addresses and Notices 55
16.2 Further Action 55
16.3 Binding Effect 55
16.4 Integration 55
16.5 Creditors 55
16.6 Waiver 56
16.7 Counterparts 56
16.8 Applicable Law 56
16.9 Invalidity of Provisions 56
16.10 Consent of Partners 56
THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
GENESIS ENERGY, L.P.
THIS THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP of
Genesis Energy, L.P. dated as of July 31, 2002, is entered into by and among
Genesis Energy, Inc., a Delaware corporation, as the General Partner,
together with any other Persons who are or who become Partners in the
Partnership or parties hereto as provided herein. In consideration of the
covenants, conditions and agreements contained herein, the parties hereto
hereby agree as follows:
WHEREAS, the General Partner and certain other parties
organized the Partnership as a Delaware limited partnership
pursuant to an Amended and Restated Agreement of Limited
Partnership dated as of December 3, 1996 (the "Previous
Agreement");
WHEREAS, on December 7, 2000, the partners of the Partnership
and Genesis OLP approved by requisite vote a restructuring (the
"Restructuring") of the Partnership and Genesis OLP pursuant to
which (a) all outstanding Subordinated LP Units and APIs (each as
defined in the Genesis OLP Partnership Agreement) were eliminated,
(b) the Previous Agreement and the previous Genesis OLP
Partnership Agreement were amended to, among other things, reduce
the Minimum Quarterly Distribution, the First Target Distribution,
the Second Target Distribution and the Third Target Distribution
(each as defined in the Genesis OLP Partnership Agreement) and
provide that the Common Units (as defined in the Genesis OLP
Partnership Agreement) would not accrue arrearages if the Minimum
Quarterly Distribution were not paid in full in any Quarter, (c)
Salomon l contributed to Genesis OLP the remaining $3,802,000 of
its distribution support obligation under the Distribution Support
Agreement (the "Remaining Distribution Support"), (d) Genesis OLP
made a special distribution of the Remaining Distribution Support
less the cost associated with the restructuring to the Partnership
and the Partnership made a special distribution of such amount to
the holders of Common Units, (e) the Distribution Support
Agreement was terminated, (f) the Partnership withdrew as a
general partner of Genesis OLP and the Partnership's 80.01%
general partner interest in Genesis OLP represented by 8,801,020
Subordinated GP Units were converted into a 99.99% limited partner
interest, (g) the General Partner's 0.40% general partner interest
in Genesis OLP represented by 43,980 Subordinated GP Units were
converted into a 0.01% general partner interest and (h) Salomon's
$300 million credit support obligation under the Master Credit
Support Agreement was extended until December 31, 2001 on the
existing terms and conditions;
WHEREAS, on December 7, 2000, the General Partner and certain
other parties amended and restated the Previous Agreement to enter
into the Second Amended and Restated Agreement of Limited
Partnership of Genesis Energy, L.P. ("Second Amended Agreement")
to reflect the Restructuring and such other changes that, in the
discretion of the General Partner, did not adversely affect the
Limited Partners in any material respect;
WHEREAS, on May 14, 2002, Genesis Energy, L.L.C., the sole
general partner, was converted from a Delaware limited liability
company to a Delaware corporation pursuant to Delaware law and
such corporation is incorporated in the state of Delaware as
Genesis Energy, Inc.;
WHEREAS, on July 3, 2002, the General Partner proposed to the
Audit Committee of the Board of Directors of the General Partner
that it desired to amend Section 11.2 in order to broaden the
rights of limited partners to remove the General Partner;
WHEREAS, on July 31, 2002, the Audit Committee, after
obtaining the advice of Delaware counsel and an investment banking
firm, unanimously provided Special Approval of proposed amendments
to Section 11.2 to the General Partner; and
WHEREAS, Genesis Energy, Inc., as the sole general partner,
now desires to amend and restate the Second Amended Agreement to
reflect such proposed amendments to Section 11.2 in order to
broaden the rights of limited partners to remove the General
Partner, to reflect the change in the General Partner's name and
form as a Delaware corporation on May 14, 2002 and such other
changes that, in the discretion of Genesis Energy, Inc., do not
adversely affect the Limited Partners in any material respect;
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby amend and
restate the Second Amended Agreement in its entirety:
ARTICLE I
Definitions
1.1 Definitions
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this
Agreement.
"Acquisition" means any transaction in which any Group Member acquires
(through an asset acquisition, merger, stock acquisition or other form of
investment) control over all or a portion of the assets, properties or
business of another Person for the purpose of increasing the operating
capacity or revenues of the Partnership Group from the operating capacity or
revenues of the Partnership Group existing immediately prior to such
transaction.
"Additional Limited Partner" means a Person admitted to the Partnership
as a Limited Partner pursuant to Section 10.4 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 6.1(c)(i) or
6.1(c)(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.
"Adjusted Property" means any property the Carrying Value of which has
been adjusted pursuant to Section 5.4(d)(i) or 5.4(d)(ii).
"Affiliate" means, with respect to any Person, any other Person that
(i) directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, the Person in question or
(ii) owns, beneficially, directly or indirectly, 20% or more of the
outstanding capital stock, shares or other equity interests of the Person in
question. As used herein, the term "control" means the possession, direct or
indirect, of the power to direct or cause the direction of the management
and policies of a Person, whether through ownership of voting securities, by
contract or otherwise.
"Agreed Allocation" means any allocation, other than a Required
Allocation, of an item of income, gain, loss or deduction pursuant to the
provisions of Section 6.1, 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 or other consideration at the time of contribution as
determined by the General Partner using such reasonable method of valuation
as it may adopt. The General Partner shall, in its 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 Genesis Energy, L.P., as it may be amended, supplemented or
restated from time to time.
"API" has the meaning assigned to such term in the Genesis OLP
Partnership Agreement.
"Assignee" means a Non-citizen Assignee or a Person to whom one or more
Limited Partner Interests 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 been admitted as a Substituted
Limited Partner.
"Associate" means, when used to indicate a relationship with any
Person, (a) any corporation or organization of which such Person is a
director, officer or partner or is, directly or indirectly, the owner of 20%
or more of any class of voting stock or other voting interest; (b) any trust
or other estate in which such Person has at least a 20% beneficial interest
or as to which such Person serves as trustee or in a similar fiduciary
capacity; and (c) any relative or spouse of such Person, or any relative of
such spouse, who has the same principal residence as such Person.
"Audit Committee" means a committee of the Board of Directors of the
General Partner composed entirely of two or more directors who are neither
officers nor employees of the General Partner or officers, directors or
employees of any Affiliate of the General Partner.
"Available Cash" means, with respect to any Quarter ending prior to the
Liquidation Date,
(a) the sum of (i) all cash and cash equivalents of the
Partnership on hand at the end of such Quarter and (ii) all additional
cash and cash equivalents of the Partnership on hand on the date of
determination of Available Cash with respect to such Quarter resulting
from borrowings for working capital purposes, less
(b) the amount of any cash reserves that is necessary or
appropriate in the reasonable discretion of the General Partner to (i)
provide for the proper conduct of the business of the Partnership Group
(including reserves for future capital expenditures and for anticipated
future credit needs of the business of the Partnership Group)
subsequent to such Quarter or (ii) comply with applicable law or any
loan agreement (including the Master Credit Support Agreement),
security agreement (including the Security Agreement), mortgage, debt
instrument or other agreement or obligation to which any Group Member
is a party or by which it is bound or its assets are subject; provided,
however, that disbursements made by the Partnership or cash reserves
established, increased or reduced after the end of such Quarter but on
or before the date of determination of Available Cash with respect to
such Quarter shall be deemed to have been made, established, increased
or reduced, for purposes of determining Available Cash, within such
Quarter if the General Partner so determines.
Notwithstanding the foregoing, "Available Cash" with respect to
the Quarter in which the Liquidation Date occurs and any subsequent
Quarter shall equal zero.
"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 5.4 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 of
America or the states of New York or Texas shall not be regarded as a
Business Day.
"Capital Account" means the capital account maintained for a Partner
pursuant to Section 5.4.
"Capital Contribution" means any cash, cash equivalents or the Net
Agreed Value of Contributed Property that a Partner contributed to the
Partnership pursuant to this Agreement (or the Previous Agreement).
"Capital Improvement" means any (a) addition or improvement to the
capital assets owned by any Group Member or (b) acquisition of existing or
the construction of new capital assets (including pipeline systems, storage
facilities and related assets), made to increase the operating capacity or
revenues of the Partnership Group from the operating capacity or revenues of
the Partnership Group existing immediately prior to such addition,
improvement, acquisition or construction.
"Carrying Value" means (a) with respect to a Contributed Property, the
Agreed Value of such property reduced (but not below zero) by all
depreciation, amortization and cost recovery deductions charged to the
Partners' and Assignees' Capital Accounts in respect of such Contributed
Property, and (b) with respect to any other Partnership property, the
adjusted basis of such property for federal income tax purposes, all as of
the time of determination. The Carrying Value of any property shall be
adjusted from time to time in accordance with Sections 5.4(d)(i) and
5.4(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.
"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.
"Certificate" means a certificate, (i) substantially in the form of
Exhibit A to this Agreement, (ii) issued in global form in accordance with
the rules of the Depositary or (iii) in such other form as may be adopted by
the General Partner in its discretion, issued by the Partnership evidencing
ownership of one or more Common Units or a certificate, in such form as may
be adopted by the General Partner in its discretion, issued by the
Partnership evidencing ownership of one or more other Partnership
Securities.
"Certificate of Limited Partnership" means the Amended and Restated
Certificate of Limited Partnership of the Partnership filed with the
Secretary of State of the State of Delaware as referenced in Section 7.2, as
such Certificate of Limited Partnership may be amended, supplemented or
restated from time to time.
"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.
"claim" has the meaning assigned to such term in Section 7.12(c).
"Closing Price" has the meaning assigned to such term in Section
15.1(a).
"Code" means the Internal Revenue Code of 1986, as amended and in
effect from time to time. Any reference herein to a specific section or
sections of the Code shall be deemed to include a reference to any
corresponding provision of future law.
"Combined Interest" has the meaning assigned to such term in Section
11.3(a).
"Commission" means the United States Securities and Exchange
Commission.
"Common Unit" means a Partnership Security representing a fractional
part of the Partnership Interests of all Limited Partners and Assignees and
having the rights and obligations specified with respect to a Common Unit in
this Agreement.
"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 5.4(d), such property shall no longer
constitute a Contributed Property, but shall be deemed an Adjusted Property.
"Conversion Election" has the meaning assigned to such term in the
Genesis OLP Partnership Agreement.
"Conveyance Agreement" means that certain Purchase & Sale and
Contribution & Conveyance Agreement, dated as of November 26, 1996, among
the Partnership, Genesis OLP, Genesis Energy, L.L.C., ▇▇▇▇▇▇ and a
Subsidiary of Salomon, together with the additional conveyance documents and
instruments contemplated or referenced thereunder.
"Curative Allocation" means any allocation of an item of income, gain,
deduction, loss or credit pursuant to the provisions of Section 6.1(c)(ix).
"Current Market Price" has the meaning assigned to such term in Section
15.1(a).
"Delaware Act" means the Delaware Revised Uniform Limited Partnership
Act, 6 Del C. 17-101, et seq., as amended, supplemented or restated from
time to time, and any successor to such statute.
"Departing Partner" means a former General Partner from and after the
effective date of any withdrawal or removal of such former General Partner
pursuant to Section 11.1 or 11.2.
"Depositary" means, with respect to any Units issued in global form,
The Depository Trust Company and its successors and permitted assigns.
"Distribution Support Agreement" means the Distribution Support
Agreement, dated as of December 3, 1996, between the Genesis OLP and
Salomon, which sets forth the agreement of the Partnership and Salomon
relating to the purchase of APIs.
"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 any Group Member 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 such Group Member to a
significant risk of cancellation or forfeiture of any of its properties or
any interest therein.
"Event of Withdrawal" has the meaning assigned to such term in Section
11.1(a).
"GP Unit" means a Partnership Security representing a fractional part
of the Partnership Interest of the General Partner and having the rights and
obligations specified with respect to GP Units in this Agreement.
"General Partner" means Genesis Energy, L.L.C. and its successors and
permitted assigns as general partner of the Partnership.
"General Partner Interest" means the ownership interest of the General
Partner in the Partnership (in its capacity as a general partner without
reference to any Limited Partner Interest held by it), which may be
evidenced by GP Units or other Partnership Securities or a combination
thereof or interest therein, and includes any and all benefits to which the
General Partner is entitled as provided in this Agreement, together with all
obligations of the General Partner to comply with the terms and provisions
of this Agreement.
"Genesis OLP" means Genesis Crude Oil, L.P., a Delaware limited
partnership, and its successors.
"Genesis OLP Partnership Agreement" means the Third Amended and
Restated Agreement of Limited Partnership of Genesis Crude Oil, L.P., as it
may be amended, supplemented or restated from time to time.
"Group" means a Person that with or through any of its Affiliates or
Associates has any agreement, arrangement or understanding for the purpose
of acquiring, holding, voting (except voting pursuant to a revocable proxy
or consent given to such Person in response to a proxy or consent
solicitation made to 10 or more Persons) or disposing of any Partnership
Securities with any other Person that beneficially owns, or whose Affiliates
or Associates beneficially own, directly or indirectly, Partnership
Securities.
"Group Member" means a member of the Partnership Group.
"Holder" as used in Section 7.12, has the meaning assigned to such term
in Section 7.12(a).
"▇▇▇▇▇▇" means ▇▇▇▇▇▇ Corporation and its Subsidiaries.
"Incentive Compensation Payment" has the meaning assigned to such term
in the Genesis OLP Partnership Agreement.
"Indemnified Persons" has the meaning assigned to such term in Section
7.12(c).
"Indemnitee" means (a) the General Partner, any Departing Partner and
any Person who is or was an Affiliate of the General Partner or any
Departing Partner, (b) any Person who is or was a director, officer,
employee, agent or trustee of a Group Member, (c) any Person who is or was a
member, officer, director, employee, agent or trustee of the General Partner
or any Departing Partner or any Affiliate of the General Partner or any
Departing Partner, or any Affiliate of any such Person, and (d) 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, member,
partner, agent, fiduciary or trustee of another Person; provided, that a
Person shall not be an Indemnitee by reason of providing, on a fee-for-
services basis, trustee, fiduciary or custodial services.
"Initial Closing Date" means December 3, 1996.
"Initial Offering" means the initial offering and sale of Common Units
to the public on December 3, 1996, as described in the Registration
Statement.
"Limited Partner" means, unless the context otherwise requires,
(a) each Initial Limited Partner, each Substituted Limited Partner, each
Additional Limited Partner, and any Partner upon the change of its status
from General Partner to Limited Partner pursuant to Section 11.3 and (b)
solely for purposes of Articles V, VI, VII and IX and Section 12.4, each
Assignee.
"Limited Partner Interest" means the ownership interest of a Limited
Partner or Assignee in the Partnership, which may be evidenced by Common
Units or other Partnership Securities or a combination thereof or interest
therein, and includes any and all benefits to which such Limited Partner or
Assignee is entitled as provided in this Agreement, together with all
obligations of such Limited Partner or Assignee to comply with the terms and
provisions of this Agreement.
"Liquidation Date" means (a) in the case of an event giving rise to the
dissolution of the Partnership of the type described in clauses (a) and (b)
of the first sentence of Section 12.2, the date on which the applicable time
period during which the Partners have the right to elect to reconstitute the
Partnership and continue its business has expired without such an election
being made, and (b) in the case of any other event giving rise to the
dissolution of the Partnership, the date on which such event occurs.
"Liquidator" means one or more Persons selected by the General Partner
to perform the functions described in Section 12.3 as liquidating trustee of
the Partnership within the meaning of the Delaware Act.
"Master Credit Support Agreement" means the Master Credit Support
Agreement, dated as of December 3, 1996, as amended, between Genesis OLP and
Salomon which sets forth the agreement of Genesis OLP and Salomon relating
to the credit support to be provided by Salomon to Genesis OLP.
"Majority Interest" means at least a majority in Voting Power of the
Outstanding Limited Partner Interests.
"Merger Agreement" has the meaning assigned to such term in Section
14.1.
"National Securities Exchange" means an exchange registered with the
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, or the Nasdaq Stock Market or any successor thereto.
"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 5.4(d)(ii)) at the time
such property is distributed, reduced by any indebtedness either assumed by
such Partner or Assignee upon such distribution or to which such property is
subject at the time of distribution, in either case, as determined under
Section 752 of the Code.
"Net Income" means, for any taxable year, the excess, if any, of the
Partnership's items of income and gain for such taxable year over the
Partnership's items of loss and deduction for such taxable year. The items
included in the calculation of Net Income shall be determined in accordance
with Section 5.4(b) and shall not include any items specially allocated
under Section 6.1(c).
"Net Loss" means, for any taxable year, the excess, if any, of the
Partnership's items of loss and deduction for such taxable year over the
Partnership's items of income and gain for such taxable year. The items
included in the calculation of Net Loss shall be determined in accordance
with Section 5.4(b) and shall not include any items specially allocated
under Section 6.1(c).
"Ninety Percent Interest" means at least 90% in Voting Power of the
Outstanding Limited Partner Interests.
"Non-Competition Agreement" means the Non-Competition Agreement, dated
as of December 3, 1996, among the Partnership, Genesis OLP, Salomon, Basis
Petroleum, Inc. and ▇▇▇▇▇▇.
"Non-citizen Assignee" means a Person whom the General Partner has
determined in its discretion does not constitute an Eligible Citizen and as
to whose Limited Partner Interest the General Partner has become the
Substituted Limited Partner, pursuant to Section 4.8.
"Nonrecourse Built-in Gain" means with respect to any Contributed
Properties or Adjusted Properties that are subject to a mortgage or pledge
securing a Nonrecourse Liability, the amount of any taxable gain that would
be allocated to the Partners pursuant to Sections 6.2(b)(i)(A),
6.2(b)(ii)(A) and 6.2(b)(iii) if such properties were disposed of in a
taxable transaction in full satisfaction of such liabilities and for no
other consideration.
"Nonrecourse Deductions" means any and all items of loss, deduction or
expenditures (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(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 15.1(b) hereof.
"OLP General Partner Interest" has the meaning assigned to the term
"General Partner Interest" in the Genesis OLP Partnership Agreement.
"Opinion of Counsel" means a written opinion of counsel (who may be
regular counsel to the Partnership or the General Partner or any of their
Affiliates) acceptable to the General Partner in its reasonable discretion.
"Outstanding" means, with respect to Partnership Securities, all
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, however, that if at any time any Person or Group
(other than the General Partner or its Affiliates) beneficially owns 20% or
more of any Outstanding Partnership Securities of any class then
Outstanding, all Partnership Securities owned by such Person or Group shall
not be voted on any matter and shall not be considered to be Outstanding
when sending notices of a meeting of Limited Partners to vote on any matter
(unless otherwise required by law), calculating required votes, determining
the presence of a quorum or for other similar purposes under this Agreement,
except that such Partnership Securities shall be considered to be
Outstanding for purposes of Section 11.1(b)(iv) (such Partnership Securities
shall not, however, be treated as a separate class of Partnership Securities
for purposes of this Agreement).
"Parity Units" means Common Units and all other Limited Partner
Interests having rights to distributions or in liquidation ranking on a
parity with the Common Units.
"Partner" means the General Partner and each Limited Partner.
"Partner Nonrecourse Debt" has the meaning set forth in Treasury
Regulation Section 1.704-2(b)(4).
"Partner Nonrecourse Debt Minimum Gain" has the meaning set forth in
Treasury Regulation Section 1.704-2(i)(2).
"Partner Nonrecourse Deductions" means any and all items of loss,
deduction or expenditure (including, without limitation, any expenditure
described in Section 705(a)(2)(B) of the Code) that, in accordance with the
principles of Treasury Regulation Section 1.704-2(i), are attributable to a
Partner Nonrecourse Debt.
"Partnership" means Genesis Energy, L.P., a Delaware limited
partnership, and any successors thereto.
"Partnership Group" means the Partnership, Genesis OLP and any other
Subsidiary of the Partnership, treated as a single consolidated entity.
"Partnership Interest" means an ownership interest in the Partnership,
which shall include General Partner Interests and Limited Partner Interests.
"Partnership Minimum Gain" means that amount determined in accordance
with the principles of Treasury Regulation Section 1.704-2(d).
"Partnership Security" means any class or series of equity interest in
the Partnership and shall include, without limitation, Common Units and GP
Units.
"Percentage Interest" means as of the date of such determination (a) as
to any Partner or Assignee holding Units, the product obtained by
multiplying (i) 100% less the percentage applicable to paragraph (b) by (ii)
the quotient obtained by dividing (A) the number of Units held by such
Partner or Assignee by (B) the total number of all Outstanding Units, and
(b) as to the holders of additional Partnership Securities issued by the
Partnership in accordance with Section 5.5, the percentage established as a
part of such issuance.
"Person" means an individual or a corporation, limited liability
company, partnership, joint venture, trust, unincorporated organization,
association, government agency or political subdivision thereof or other
entity.
"Previous Agreement" has the meaning assigned to such term in the
recitals to this Agreement.
"Pro Rata" means (a) when modifying Units or any class thereof,
apportioned among all designated Units in accordance with their relative
Percentage Interests and (b) when modifying Partners and Assignees,
apportioned among all Partners and Assignees in accordance with their
respective Percentage Interests.
"Proxy Statement" means the definitive Proxy Statement filed by the
Partnership with the Commission under the Securities Exchange Act of 1934,
as amended, for the purpose of soliciting the votes of the holders of Common
Units with respect to the Restructuring, as it has been or as it may be
amended or supplemented from time to time.
"Purchase Date" means the date determined by the General Partner as the
date for purchase of all Limited Partner Interests of a certain class (other
than Limited Partner Interests owned by the General Partner and its
Affiliates) pursuant to Article XV.
"Quarter" means, unless the context requires otherwise, a calendar
quarter.
"Recapture Income" means any gain recognized by the Partnership
(computed without regard to any adjustment required by Section 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 Holders 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 or participate in any offer.
"Record Holder" means the Person in whose name a Common Unit is
registered on the books of the Transfer Agent as of the opening of business
on a particular Business Day, or with respect to other Partnership
Securities, the Person in whose name any such other Partnership Security is
registered on the books which the General Partner has caused to be kept as
of the opening of business on such Business Day.
"Redeemable Interests" means any Limited Partner Interests for which a
redemption notice has been given, and has not been withdrawn, pursuant to
Section 4.9.
"Registration Statement" means the Registration Statement on Form S-1
(Registration No. 333-11545) as amended, filed by the Partnership with the
Commission under the Securities Act to register the offering and sale of the
Common Units in the Initial Offering.
"Required Allocations" means (a) any limitation imposed on any
allocation of Net Loss under Section 6.1(b) and (b) any allocation of an
item of income, gain, loss or deduction pursuant to Section 6.1(c)(i),
6.1(c)(ii), 6.1(c)(iii), 6.1(c)(vi) or 6.1(c)(viii).
"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 Section 6.2(b)(i)(A) or 6.2(b)(ii)(A),
respectively, to eliminate Book-Tax Disparities.
"Restructuring" has the meaning set forth in the recitals to this
Agreement.
"Salomon" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Holdings Inc, a Delaware
corporation, and Salomon Brothers Holdings, Inc., a Delaware corporation.
"Securities Act" means the Securities Act of 1933, as amended,
supplemented or restated from time to time and any successor to such
statute.
"Security Agreement" means the Security Agreement, dated as of December
3, 1996, among Genesis OLP, Salomon and the Secured Parties (as defined in
the Security Agreement) securing the obligations of Genesis OLP under the
Master Credit Support Agreement and creating a security interest in the
Collateral (as defined in the Security Agreement) in favor of the Collateral
Agent (as defined in the Security Agreement).
"Special Approval" means approval by a majority of the members of the
Audit Committee.
"Subsidiary" means, with respect to any Person, (a) a corporation of
which more than 50% of the voting power of shares entitled (without regard
to the occurrence of any contingency) to vote in the election of directors
or other governing body of such corporation is owned, directly or
indirectly, at the date of determination, by such Person, by one or more
Subsidiaries of such Person or a combination thereof, (b) a partnership
(whether general or limited) in which such Person or a Subsidiary of such
Person is, at the date of determination, a general or limited partner of
such partnership, but only if more than 50% of the partnership interests of
such partnership (considering all of the partnership interests of such
partnership as a single class) is owned, directly or indirectly, at the date
of determination, by such Person, by one or more Subsidiaries of such
Person, or a combination thereof, or (c) any other Person (other than a
corporation or a partnership) in which such Person, one or more Subsidiaries
of such Person, or a combination thereof, directly or indirectly, at the
date of determination, has (i) at least a majority ownership interest or
(ii) the power to elect or direct the election of a majority of the
directors or other governing body of such Person.
"Substituted Limited Partner" means a Person who is admitted as a
Limited Partner to the Partnership pursuant to Section 10.2 in place of and
with all the rights of a Limited Partner and who is shown as a Limited
Partner on the books and records of the Partnership.
"Surviving Business Entity" has the meaning assigned to such term in
Section 14.2(b).
"Trading Day" has the meaning assigned to such term in Section 15.1(a).
"transfer" has the meaning assigned to such term in Section 4.4(a).
"Transfer Agent" means such bank, trust company or other Person
(including 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 Common Units.
"Transfer Application" means an application and agreement for transfer
of Partnership Securities in the form set forth on the back of a Certificate
or in a form substantially to the same effect in a separate instrument.
"Two-Thirds Interest" means at least 66_% in Voting Power of the
Outstanding Limited Partner Interests.
"Unit" means a Common Unit or a GP Unit or any other Partnership
Security that is designated as a "Unit."
"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
5.4(d)) over (b) the Carrying Value of such property as of such date (prior
to any adjustment to be made pursuant to Section 5.4(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 5.4(d) as of such date) over (b) the fair market
value of such property as of such date (as determined under Section 5.4(d)).
"U.S. GAAP" means United States Generally Accepted Accounting
Principles consistently applied.
"Voting Power" means the right, if any, of the holder of a Partnership
Security to vote on Partnership matters. Each Common Unit shall entitle the
holder thereof to one vote. Each additional Partnership Security shall
entitle the holder thereof to such vote, if any, as shall be established at
the time of issuance of such Partnership Security.
"Withdrawal Opinion of Counsel" has the meaning assigned to such term
in Section 11.1(b).
1.2 Construction
Unless the context requires otherwise: (a) 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; (b) references to Articles and Sections refer to
Articles and Sections of this Agreement; and (c) "include" or "includes"
means includes, without limitation, and "including" means including, without
limitation.
ARTICLE II
Organization
2.1 Continuation of Existence
The General Partner and the Limited Partners hereby amend and restate
the Previous Agreement in its entirety to continue the Partnership as a
limited partnership pursuant to the provisions of the Delaware Act and to
set forth the rights and obligations of the Partners and certain matters
related thereto. This amendment and restatement shall become effective on
the date of this Agreement. Except as expressly provided to the contrary in
this Agreement, the rights, duties (including fiduciary duties), liabilities
and obligations of the Partners and the administration, dissolution and
termination of the Partnership shall be governed by the Delaware Act. All
Partnership Interests shall constitute personal property of the owner
thereof for all purposes and a Partner has no interest in specific
Partnership property.
2.2 Name
The name of the Partnership shall be "Genesis Energy, L.P." The
Partnership's business may be conducted under any other name or names deemed
necessary or appropriate by the General Partner in its sole discretion,
including the name of the General Partner. The words "Limited Partnership,"
"L.P.," "Ltd." or similar words or letters shall be included in the
Partnership's name where necessary for the purpose of complying with the
laws of any jurisdiction that so requires. The General Partner in its
discretion may change the name of the Partnership at any time and from time
to time and shall notify the Limited Partners of such change in the next
regular communication to the Limited Partners.
2.3 Registered Office; Registered Agent; Principal Office; Other Offices
Unless and until changed by the General Partner, the registered office
of the Partnership in the State of Delaware shall be located at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and the registered
agent for service of process on the Partnership in the State of Delaware at
such registered office shall be CT Corporation System. The principal office
of the Partnership shall be located at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇ 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. 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.
2.4 Purpose and Business
The purpose and nature of the business to be conducted by the
Partnership shall be to (a) serve as a general partner in Genesis OLP and,
in connection therewith, to exercise all the rights and powers conferred
upon the Partnership as a general partner in Genesis OLP pursuant to the
Genesis OLP Partnership Agreement or otherwise, (b) engage directly in, or
enter into or form any corporation, partnership, joint venture, limited
liability company or other arrangement to engage indirectly in, any business
activity that Genesis OLP is permitted to engage in by the Genesis OLP
Partnership Agreement and, in connection therewith, to exercise all of the
rights and powers conferred upon the Partnership pursuant to the agreements
relating to such business activity, (c) engage directly in, or to enter into
or form any corporation, partnership, joint venture, limited liability
company or other arrangement to engage indirectly in, any business activity
that is approved by the General Partner and which lawfully may be conducted
by a limited partnership organized pursuant to the Delaware Act and, in
connection therewith, to exercise all of the rights and powers conferred
upon the Partnership pursuant to the agreements relating to such business
activity, and (d) do anything necessary or appropriate to the foregoing,
including the making of capital contributions or loans to a Group Member.
The General Partner has no obligation or duty to the Partnership, the
Limited Partners, or the Assignees to propose or approve, and in its
discretion may decline to propose or approve, the conduct by the Partnership
of any business.
2.5 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 2.4 and for the protection and benefit of the Partnership.
2.6 Power of Attorney
(a) Each Limited Partner and each Assignee hereby constitutes and
appoints the General Partner and, if a Liquidator shall have been selected
pursuant to Section 12.3, the Liquidator, severally (and any successor to
the Liquidator by merger, transfer, assignment, election or otherwise) and
each of their authorized officers and attorneys-in-fact, as the case may be,
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 this Agreement and the Certificate of Limited
Partnership and all amendments or restatements hereof or thereof) that
the General Partner or the Liquidator deems necessary or appropriate to
form, qualify or continue the existence or qualification of the
Partnership as a limited partnership (or a partnership in which the
limited partners have limited liability) in the State of Delaware and
in all other jurisdictions in which the Partnership may conduct
business or own property; (B) all certificates, documents and other
instruments that the General Partner or the Liquidator deems necessary
or appropriate to reflect, in accordance with its terms, any amendment,
change, modification or restatement of this Agreement; (C) all
certificates, documents and other instruments (including 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 IV, X, XI or
XII; (E) all certificates, documents and other instruments relating to
the determination of the rights, preferences and privileges of any
class or series of Partnership Securities issued pursuant to Section
5.5; and (F) all certificates, documents and other instruments
(including agreements and a certificate of merger) relating to a merger
or consolidation of the Partnership pursuant to Article XIV; 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 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 discretion of
the General Partner or the Liquidator, to effectuate the terms or
intent of this Agreement; provided, that when required by Section 13.3
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 and the
Liquidator may exercise the power of attorney made in this Section
2.6(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 2.6(a) shall be construed as
authorizing the General Partner to amend this Agreement except in accordance
with Article XIII 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,
to the maximum extent permitted by law, 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, to the maximum extent permitted
by law, 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 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.
2.7 Term
The term of the Partnership shall continue until the close of
Partnership business on December 31, 2086 or until the earlier dissolution
of the Partnership in accordance with the provisions of Article XII. The
existence of the Partnership as a separate legal entity shall continue until
the cancellation of the Certificate of Limited Partnership as provided in
the Delaware Act.
2.8 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 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,
further, 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 General Partner. 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.
ARTICLE III
Rights of Limited Partners
3.1 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.
3.2 Management of Business
No Limited Partner or Assignee, in its capacity as such, 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. Any action taken by any Affiliate of the General
Partner or any officer, director, employee, member, general partner, agent
or trustee of the General Partner or any of its Affiliates, or any officer,
director, employee, member, general partner, agent or trustee of a Group
Member, in its capacity as such, shall not be deemed to be participation in
the control of the business of the Partnership by a limited partner of the
Partnership (within the meaning of Section 17-303(a) of the Delaware Act)
and shall not affect, impair or eliminate the limitations on the liability
of the Limited Partners or Assignees under this Agreement.
3.3 Outside Activities of the Limited Partners
Subject to the provisions of Section 7.5, 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 business interests and activities in direct competition with the
Partnership Group. 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.
3.4 Rights of Limited Partners
(a) In addition to other rights provided by this Agreement or by
applicable law, and except as limited by Section 3.4(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 written demand and at such Limited Partner's own expense:
(i) to obtain true and full information regarding the status of the
business and financial condition of the Partnership;
(ii) promptly after becoming available, to obtain a copy of the
Partnership's federal, state and local tax returns for each year;
(iii) to have furnished to him a current list of the name and last
known business, residence or mailing address of each Partner;
(iv) to have furnished to him a copy of this Agreement and the
Certificate of Limited Partnership and all amendments thereto, together
with a copy of the executed copies of all powers of attorney pursuant
to which this Agreement, the Certificate of Limited Partnership and all
amendments thereto have been executed;
(v) to obtain true and full information regarding the amount of cash
and a description and statement of the Net 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) The General Partner may keep confidential from the Limited
Partners and Assignees, for such period of time as the General Partner deems
reasonable, (i) any information that the General Partner reasonably believes
to be in the nature of trade secrets or (ii) other information the
disclosure of which the General Partner in good faith believes (A) is not in
the best interests of the Partnership Group, (B) could damage the
Partnership Group or (C) that any Group Member is required by law or by
agreement with any third party to keep confidential (other than agreements
with Affiliates of the Partnership the primary purpose of which is to
circumvent the obligations set forth in this Section 3.4).
ARTICLE IV
Certificates; Record Holders; Transfer of
Partnership Interests; Redemption of
Partnership Interests
4.1 Certificates
Upon the Partnership's issuance of Common Units to any Person, the
Partnership shall issue one or more Certificates in the name of such Person
evidencing the number of such Common Units being so issued. In addition, the
General Partner may cause the Partnership to issue Certificates evidencing
ownership of one or more other classes or series of Partnership Securities.
Certificates shall be executed on behalf of the Partnership by the Chairman
of the Board, President or any Vice President and the Secretary or any
Assistant Secretary of the General Partner. No Common Unit Certificate shall
be valid for any purpose until it has been countersigned by the Transfer
Agent; provided, however, that if the General Partner elects to issue Common
Units in global form, the Common Unit Certificates shall be valid upon
receipt of a certificate from the Transfer Agent certifying that the Common
Units have been duly registered in accordance with the directions of the
Partnership.
4.2 Mutilated, Destroyed, Lost or Stolen Certificates
(a) If any mutilated Certificate is surrendered to the Transfer Agent,
the appropriate officers of the General Partner on behalf of the Partnership
shall execute and deliver and, in the case of a Common Unit Certificate, the
Transfer Agent shall countersign, in exchange therefor, a new Certificate
evidencing the same number and type of Partnership Securities as the
Certificate so surrendered.
(b) The appropriate officers of the General Partner on behalf of the
Partnership shall execute and deliver and, in the case of a Common Unit
Certificate, the Transfer Agent shall countersign (or, in the case of Common
Units issued in global form, register in accordance with the rules and
regulations of the Depositary), a new Certificate in place of any
Certificate previously issued if the Record Holder of the Certificate:
(i) makes proof by affidavit, in form and substance satisfactory to
the Partnership, 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 Partnership, delivers to the Partnership a
bond, in form and substance satisfactory to the Partnership, with
surety or sureties and with fixed or open penalty as the Partnership
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
Partnership.
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 Limited Partner Interests 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 4.2, the Partnership 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 the fees and expenses of the
Transfer Agent) reasonably connected therewith.
4.3 Record Holders
The Partnership shall be entitled to recognize the Record Holder as the
Partner or Assignee with respect to any Partnership Interest and,
accordingly, shall not be bound to recognize any equitable or other claim to
or interest in such Partnership Interest on the part of any other Person,
regardless of whether 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 Limited Partner Interests 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 Limited Partner Interests, as between the
Partnership on the one hand, and such other Persons on the other, such
representative Person (a) shall be the 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 Partner or Assignee (as the case may be)
hereunder and as, and to the extent, provided for herein.
4.4 Transfer Generally
(a) The term "transfer," when used in this Agreement with respect to a
Partnership Interest, shall be deemed to refer to a transaction by which the
General Partner assigns its General Partner Interest to another Person who
becomes the General Partner, or by which the holder of a Limited Partner
Interest assigns such Limited Partner Interest to another Person who is or
becomes a Limited Partner or 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
IV. Any transfer or purported transfer of a Partnership Interest not made in
accordance with this Article IV shall be null and void.
(c) Nothing contained in this Agreement shall be construed to prevent
a disposition by any member of the General Partner of any or all of the
issued and outstanding member interests in the General Partner.
4.5 Registration and Transfer of Limited Partner Interests
(a) The Partnership shall keep or 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 4.5(b), the
Partnership will provide for the registration and transfer of Limited
Partner Interests. The Transfer Agent is hereby appointed registrar and
transfer agent for the purpose of registering Common Units and transfers of
such Common Units as herein provided. The Partnership shall not recognize
transfers of Certificates evidencing Limited Partner Interests unless such
transfers are effected in the manner described in this Section 4.5. Upon
surrender of a Certificate for registration of transfer of any Limited
Partner Interest, and subject to the provisions of Section 4.5(b), the
appropriate officers of the General Partner on behalf of the Partnership
shall execute and deliver and, in the case of Common Units, the Transfer
Agent shall countersign (or, in the case of Common Units issued in global
form, register in accordance with the rules and regulations of the
Depositary), in the name of the holder or the designated transferee or
transferees, as required pursuant to the holder's instructions, one or more
new Certificates evidencing the same aggregate number and type of Limited
Partner Interests as was evidenced by the Certificate so surrendered.
(b) Except as otherwise provided in Section 4.8, the Partnership shall
not recognize any transfer of Limited Partner Interests until the
Certificates evidencing such Limited Partner Interests are surrendered for
registration of transfer and 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 4.5, the Partnership may require the payment
of a sum sufficient to cover any tax or other governmental charge that may
be imposed with respect thereto.
(c) Limited Partner Interests may be transferred only in the manner
described in this Section 4.5. The transfer of any Limited Partner Interests
and the admission of any new Limited Partner shall not constitute an
amendment to this Agreement.
(d) Until admitted as a Substituted Limited Partner pursuant to
Section 10.2, the Record Holder of a Limited Partner Interest shall be an
Assignee in respect of such Limited Partner Interest. Limited Partners may
include custodians, nominees or any other individual or entity in its own or
any representative capacity.
(e) A transferee of a Limited Partner Interest who has completed and
delivered a Transfer Application shall be deemed to have (i) requested
admission as a Substituted Limited Partner, (ii) agreed to comply with and
be bound by and to have executed this Agreement, (iii) represented and
warranted that such transferee has the right, power and authority and, if an
individual, the capacity to enter into this Agreement, (iv) granted the
powers of attorney set forth in this Agreement and (v) given the consents
and approvals and made the waivers contained in this Agreement.
4.6 Transfer of a General Partner's General Partner Interest
Prior to December 31, 2006, the General Partner shall not transfer all
or any part of its General Partner Interest to a Person unless such transfer
(a) has been approved by the prior written consent or vote of the holders of
a Majority Interest or (b) is of all, but not less than all, of its General
Partner Interest to (i) an Affiliate of the General Partner or (ii) another
Person in connection with the merger or consolidation of the General Partner
with or into another Person or the transfer by the General Partner of all or
substantially all of its assets to another Person. Notwithstanding anything
herein to the contrary, no transfer by the General Partner of all or any
part of its General Partner Interest to another Person shall be permitted
unless (x) the transferee agrees to assume the rights and duties of the
General Partner under this Agreement and the Genesis OLP Partnership
Agreement and to be bound by the provisions of this Agreement and the
Genesis OLP Partnership Agreement, (y) 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 Genesis OLP or
cause the Partnership or Genesis OLP to be treated as an association taxable
as a corporation or otherwise to be taxed as an entity for federal income
tax purposes (to the extent not already so treated or taxed) and (z) such
transferee also agrees to purchase all (or the appropriate portion thereof,
if applicable) of the partnership interest of the General Partner as the
general partner of each other Group Member. In the case of a transfer
pursuant to and in compliance with this Section 4.6, the transferee or
successor (as the case may be) shall, subject to compliance with the terms
of Section 10.3, be admitted to the Partnership as a General Partner
immediately prior to the transfer of the General Partner Interest, and the
business of the Partnership shall continue without dissolution.
4.7 Restrictions on Transfers
(a) Notwithstanding the other provisions of this Article IV, no
transfer of any Partnership Interest shall be made if such transfer would
(i) violate the then applicable federal or state securities laws or rules
and regulations of the Commission, any state securities commission or any
other governmental authority with jurisdiction over such transfer, (ii)
terminate the existence or qualification of the Partnership or Genesis OLP
under the laws of the jurisdiction of its formation or (iii) cause the
Partnership or Genesis OLP to be treated as an association taxable as a
corporation or otherwise to be taxed as an entity for federal income tax
purposes (to the extent not already so treated or taxed).
(b) The General Partner may impose restrictions on the transfer of
Partnership Interests if a subsequent Opinion of Counsel determines that
such restrictions are necessary to avoid a significant risk of the
Partnership or Genesis OLP becoming taxable as a corporation or otherwise to
be taxed as an entity for federal income tax purposes. The restrictions may
be imposed by making such amendments to this Agreement as the General
Partner may determine to be necessary or appropriate to impose such
restrictions; provided, however, that any amendment that the General Partner
believes, in the exercise of its reasonable discretion, could result in the
delisting or suspension of trading of any class of Limited Partner Interests
on the principal National Securities Exchange on which such class of Limited
Partner Interests is then traded must be approved, prior to such amendment
being effected, by the holders of at least a majority of the Outstanding
Limited Partner Interests of such class.
(c) Nothing contained in this Article IV, or elsewhere in this
Agreement, shall preclude the settlement of any transactions involving
Partnership Interests entered into through the facilities of any National
Securities Exchange on which such Partnership Interests are listed for
trading.
4.8 Citizenship Certificates; Non-citizen Assignees
(a) If any Group Member is or becomes subject to any federal, state or
local law or regulation that, in the reasonable determination of the General
Partner, creates a substantial risk of cancellation or forfeiture of any
property in which the Group Member has an interest based on the nationality,
citizenship or other related status of a Limited Partner or Assignee, the
General Partner may request any Limited Partner or Assignee to furnish to
the General Partner, within 30 days after receipt of such request, an
executed Citizenship Certification or such other information concerning his
nationality, citizenship or other related status (or, if the Limited Partner
or Assignee is a nominee holding for the account of another Person, the
nationality, citizenship or other related status of such Person) as the
General Partner may request. If a Limited Partner or Assignee fails to
furnish to the General Partner within the aforementioned 30-day period such
Citizenship Certification or other requested information or if upon receipt
of such Citizenship Certification or other requested information the General
Partner determines, with the advice of counsel, that a Limited Partner or
Assignee is not an Eligible Citizen, the Limited Partner Interests owned by
such Limited Partner or Assignee shall be subject to redemption in
accordance with the provisions of Section 4.9. 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 Limited Partner Interests.
(b) The General Partner shall, in exercising voting rights in respect
of Limited Partner Interests held by it on behalf of Non-citizen Assignees,
distribute the votes in the same ratios as the votes of Limited Partners
(including without limitation the General Partner) in respect of Limited
Partner Interests 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 12.4 but
shall be entitled to the cash equivalent thereof, and the Partnership 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 Partnership from the
Non-citizen Assignee of his Limited Partner 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 Limited Partner Interests of such Non-citizen Assignee not
redeemed pursuant to Section 4.9, and upon his admission pursuant to Section
10.2, the General Partner shall cease to be deemed to be the Limited Partner
in respect of the Non-citizen Assignee's Limited Partner Interests.
4.9 Redemption of Partnership Interests of Non-citizen Assignees
(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 4.8(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 Limited
Partner Interests to a Person who is an Eligible Citizen and who furnishes a
Citizenship Certification to the General Partner prior to the date fixed for
redemption as provided below, redeem the Limited Partner 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 Interests, 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 Interests and that on and after the date
fixed for redemption no further allocations or distributions to which
the Limited Partner or Assignee would otherwise be entitled in respect
of the Redeemable Interests will accrue or be made.
(ii) The aggregate redemption price for Redeemable Interests shall
be an amount equal to the Current Market Price (the date of
determination of which shall be the date fixed for redemption) of
Limited Partner Interests of the class to be so redeemed multiplied by
the number of Limited Partner Interests of each such class included
among the Redeemable Interests. The redemption price shall be paid, in
the 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 Interests, 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 Interests shall no longer
constitute issued and Outstanding Limited Partner Interests.
(b) The provisions of this Section 4.9 shall also be applicable to
Limited Partner Interests 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 4.9 shall prevent the recipient of a
notice of redemption from transferring his Limited Partner Interests before
the redemption date if such transfer is otherwise permitted under this
Agreement. Upon receipt of notice of such a transfer, the General Partner
shall withdraw the notice of redemption, provided the transferee of such
Limited Partner Interests certifies to the satisfaction of the General
Partner in a Citizenship Certification delivered in connection with 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 V
Capital Contributions and Issuance of
Partnership Interests
5.1 Previous Capital Contributions
The Partners (or their predecessors) have heretofore made Capital
Contributions to the Partnership as provided in the Previous Agreement.
5.2 Additional Contributions by General Partner
Upon the issuance of any additional Limited Partner Interests, the
General Partner shall be required to make an additional Capital Contribution
equal to 1/99th of any amount contributed to the Partnership by the Limited
Partners in exchange for such additional Limited Partner Interests. Except
as set forth in the immediately preceding sentence and Article XII, the
General Partner shall not be obligated to make any Capital Contributions to
the Partnership.
5.3 Interest and Withdrawal
No interest shall be paid by the Partnership on Capital Contributions.
No Partner or Assignee shall be entitled to the withdrawal or return of its
Capital Contribution, except to the extent, if any, that distributions made
pursuant to this Agreement or upon termination of the Partnership may be
considered as such by law and then only to the extent provided for in this
Agreement. Except to the extent expressly provided in this Agreement, no
Partner or Assignee shall have priority over any other 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.
5.4 Capital Accounts
(a) The Partnership shall maintain for each Partner (or a beneficial
owner of Partnership Interests 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 (including the Previous Agreement) and
(ii) all items of Partnership income and gain (including, without
limitation, income and gain exempt from tax) computed in accordance with
Section 5.4(b) and allocated with respect to such Partnership Interest
pursuant to Section 6.1, 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
(including the Previous Agreement) and (y) all items of Partnership
deduction and loss computed in accordance with Section 5.4(b) and allocated
with respect to such Partnership Interest pursuant to Section 6.1.
(b) For purposes of computing the amount of any item of income, gain,
loss or deduction which is to be allocated pursuant to Article VI and is to
be reflected in the Partners' Capital Accounts, the determination,
recognition and classification of any such item shall be the same as its
determination, recognition and classification for federal income tax
purposes (including, without limitation, any method of depreciation, cost
recovery or amortization used for that purpose), provided, that:
(i) Solely for purposes of this Section 5.4, the Partnership shall
be treated as owning directly its proportionate share (as determined by
the General Partner based upon the provisions of the Genesis OLP
Partnership Agreement) of all property owned by Genesis OLP or any
other Subsidiary that is classified as a partnership for federal income
tax purposes.
(ii) All underwriting discounts and commissions incurred by the
Partnership in connection with the issuance of Partnership Securities
that can neither be deducted nor amortized under Section 709 of the
Code shall, for purposes of Capital Account maintenance, be treated as
an item of deduction at the time such costs are incurred and shall be
allocated 100% to the holders of such Partnership Securities in
accordance with their relative Percentage Interests. All other fees and
other expenses incurred by the Partnership to promote the sale of (or
to sell) Partnership Securities 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 6.1.
(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. 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 in the Capital Accounts
shall be treated as an item of gain or loss.
(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 5.4(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 6.1. Any restoration of such basis pursuant to
Section 48(q)(2) of the Code shall, to the extent possible, be
allocated in the same manner to the Partners to whom such deemed
deduction was allocated.
(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) In accordance with Treasury Regulation Section 1.704-
1(b)(2)(iv)(f), on an issuance of additional Partnership Interests for cash
or Contributed Property or the conversion of the General Partner's Combined
Interest to Common Units pursuant to Section 11.3(b), the Capital Account of
all Partners and the Carrying Value of each Partnership property immediately
prior to such issuance shall be adjusted upward or downward to reflect any
Unrealized Gain or Unrealized Loss attributable to such Partnership
property, as if such Unrealized Gain or Unrealized Loss had been recognized
on an actual sale of each such property immediately prior to such issuance
and had been allocated to the Partners at such time pursuant to Section 6.1
in the same manner as any item of gain or loss actually recognized during
such period would have been allocated. 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 Partnership Securities shall
be determined by the General Partner using such reasonable method of
valuation as it may adopt; provided, however, that the General Partner, in
arriving at such valuation, must take fully into account the fair market
value of the Partnership Interests of all Partners at such time. The General
Partner shall allocate such aggregate value among the assets of the
Partnership (in such manner as it determines in its discretion to be
reasonable) to arrive at a fair market value for individual properties.
(ii) In accordance with Treasury Regulation Section 1.704-
1(b)(2)(iv)(f), immediately prior to any actual or deemed distribution
to a Partner of any Partnership property (other than a distribution of
cash that is not in redemption or retirement of a Partnership
Interest), the Capital Accounts of all Partners and the Carrying Value
of all Partnership property shall be adjusted upward or downward to
reflect any Unrealized Gain or Unrealized Loss attributable to such
Partnership property, as if such Unrealized Gain or Unrealized Loss had
been recognized in a sale of such property immediately prior to such
distribution for an amount equal to its fair market value, and had been
allocated to the Partners, at such time, pursuant to Section 6.1 in the
same manner as any item of gain or loss actually recognized during such
period would have been allocated. 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 (A) in the case
of an actual distribution which is not made pursuant to Section 12.4 or
in the case of a deemed contribution and/or distribution occurring as a
result of a termination of the Partnership pursuant to Section 708 of
the Code, be determined and allocated in the same manner as that
provided in Section 5.4(d)(i) or (B) in the case of a liquidating
distribution pursuant to Section 12.4, be determined and allocated by
the Liquidator using such reasonable method of valuation as it may
adopt.
5.5 Issuances of Additional Partnership Securities
(a) The Partnership may issue additional Partnership Securities and
options, rights, warrants and appreciation rights relating to Partnership
Securities for any Partnership purpose at any time and from time to time to
such 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.
(b) Each additional Partnership Security authorized to be issued by
the Partnership pursuant to Section 5.5(a) may be issued in one or more
classes, or one or more series of any such classes, with such designations,
preferences, rights, powers and duties (which may be senior to existing
classes and series of Partnership Securities), as shall be fixed by the
General Partner in the exercise of its sole discretion, including (i) the
right to share Partnership profits and losses or items thereof; (ii) the
right to share in Partnership distributions; (iii) the rights upon
dissolution and liquidation of the Partnership; (iv) whether, and the terms
and conditions upon which, the Partnership may redeem such Partnership
Security; (v) whether such Partnership Security is issued with the privilege
of conversion or exchange and, if so, the terms and conditions of such
conversion or exchange; (vi) the terms and conditions upon which such
Partnership Security will be issued, evidenced by certificates and assigned
or transferred; and (vii) the right, if any, of such Partnership Security to
vote on Partnership matters, including matters relating to the relative
rights, preferences and privileges of such Partnership Security.
(c) The General Partner is hereby authorized and directed to take all
actions that it deems necessary or appropriate in connection with (i) each
issuance of Partnership Securities pursuant to this Section 5.5, (ii) the
conversion of a General Partner Interest into Common Units pursuant to the
terms of this Agreement, (iii) the admission of Additional Limited Partners
and (iv) all additional issuances of Partnership Securities. The General
Partner is further authorized and directed to specify the relative rights,
powers and duties of the holders of Partnership Securities being so issued.
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 or in connection with the conversion of a General Partner
Interest into Common Units pursuant to the terms of this Agreement,
including compliance with any statute, rule, regulation or guideline of any
federal, state or other governmental agency or any National Securities
Exchange on which the Common Units or other Partnership Securities are
listed for trading.
(d) No fractional Common Units shall be issued by the Partnership.
5.6 Limited Preemptive Right
Except as provided in this Section 5.6 and in Section 5.2, no Person
shall have any preemptive, preferential or other similar right with respect
to (a) additional Capital Contributions; (b) the issuance of any class or
series of Partnership Interests, whether unissued, held in the treasury or
hereafter created; (c) issuance of obligations, evidence 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 Partnership Interests; (d) issuance of any right of subscription to
or right to receive, or any warrant or option for the purchase of, any such
Partnership Interests; 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 Partnership Securities from the Partnership
whenever, and on the same terms that, the Partnership issues 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 Partnership Securities.
5.7 Splits and Combination
(a) Subject to Section 5.7(d), the Partnership may make a Pro Rata
distribution of Partnership Securities to all Record Holders or may effect a
subdivision or combination of Partnership Securities so long as, after any
such event, each Partner shall have the same Percentage Interest in the
Partnership as before such event, and any amounts calculated on a per Unit
basis or stated as a number of Units are proportionately adjusted
retroactive to the beginning of the Partnership.
(b) Whenever such a distribution, subdivision or combination of
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 thereof at least 20 days prior to such
Record Date to each Record Holder as of a 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
Partnership Securities 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 Partnership may issue Certificates to the Record Holders of
Partnership Securities as of the applicable Record Date representing the new
number of Partnership Securities held by such Record Holders, or the General
Partner may adopt such other procedures as it may deem appropriate to
reflect such changes. If any such combination results in a smaller total
number of Partnership Securities Outstanding, the Partnership 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) The Partnership shall not issue fractional Common Units upon any
distribution, subdivision or combination of Common Units. If a distribution,
subdivision or combination of Common Units would result in the issuance of
fractional Common Units but for the provisions of Section 5.5(d) and this
Section 5.7(d), each fractional Common Unit shall be rounded to the nearest
whole Common Unit (and a 0.5 Common Unit shall be rounded to the next higher
Common Unit).
5.8 Fully Paid and Non-Assessable Nature of Limited Partner Interests
All Limited Partner Interests issued pursuant to, and in accordance
with the requirements of, this Article V shall be fully paid and non-
assessable Limited Partner Interests in the Partnership, except as such non-
assessability may be affected by Section 17-607 of the Delaware Act.
ARTICLE VI
Allocations and Distributions
6.1 Allocations for Capital Account Purposes
For purposes of maintaining the Capital Accounts and in determining the
rights of the Partners among themselves, the Partnership's items of income,
gain, loss and deduction (computed in accordance with Section 5.4(b)) shall
be allocated among the Partners in each taxable year (or portion thereof) as
provided hereinbelow.
(a) Net Income. After giving effect to the special allocations set
forth in Section 6.1(c), Net Income for each taxable year and all items of
income, gain, loss and deduction taken into account in computing Net Income
for such taxable year shall be allocated among the Partners as follows:
(i) First, 100% to the General Partner until the aggregate Net
Income allocated to the General Partner pursuant to this Section
6.1(a)(i) for the current taxable year and all previous taxable years
is equal to the aggregate Net Loss allocated to the General Partner
pursuant to Section 6.1(b)(ii) for all previous taxable years; and
(ii) Second, the balance, if any, 100% to the Partners in accordance
with their respective Percentage Interests.
(b) Net Loss. After giving effect to the special allocations set forth
in Section 6.1(c), 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 among the Partners as follows:
(i) First, 100% to the Partners in accordance with their respective
Percentage Interests; provided, that Net Loss shall not be allocated
pursuant to this Section 6.1(b)(i) to the extent that such allocation
would cause any Limited 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); and
(ii) Second, the balance, if any, 100% to the General Partner.
(c) Special Allocations. Notwithstanding any other provision of this
Section 6.1, the following special allocations shall be made for such
taxable period:
(i) Partnership Minimum Gain Chargeback. Notwithstanding any other
provision of this Section 6.1, 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 6.1(c), 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 6.1(c) with respect to such
taxable period (other than an allocation pursuant to Sections 6.1(c)(v)
and 6.1(c)(vi)). This Section 6.1(c)(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 6.1 (other than
Section 6.1(c)(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 6.1(c), 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 6.1(c), other than Section 6.1(c)(i) and other
than an allocation pursuant to Sections 6.1(c)(v) and 6.1(c)(vi), with
respect to such taxable period. This Section 6.1(c)(ii) is intended to
comply with the chargeback of items of income and gain requirement in
Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted
consistently therewith.
(iii) Qualified Income Offset. In the event any Partner unexpectedly
receives any adjustments, allocations or distributions described in
Treasury Regulation Section 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 specially 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
6.1(c)(i) or 6.1(c)(ii).
(iv) Gross Income Allocations. In the event any Partner has a deficit
balance in its Capital Account at the end of any Partnership taxable
period in excess of the sum of (A) the amount such Partner is required
to restore pursuant to the provisions of this Agreement and (B) the
amount such Partner is deemed obligated to restore pursuant to Treasury
Regulation Sections 1.704-2(g) and 1.704-2(i)(5), 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 6.1(c)(iv) shall be made only if
and to the extent that such Partner would have a deficit balance in its
Capital Account as adjusted after all other allocations provided for in
this Section 6.1 have been tentatively made as if this Section
6.1(c)(iv) were not in this Agreement.
(v) 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 other Partners, to revise the prescribed ratio to the numerically
closest ratio that does satisfy such requirements.
(vi) 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.
(vii) Nonrecourse Liabilities. For purposes of Treasury Regulation
Section 1.752-3(a)(3), the Partners agree that Nonrecourse Liabilities
of the Partnership in excess of the sum of (A) the amount of
Partnership Minimum Gain and (B) the total amount of Nonrecourse Built-
in Gain shall be allocated among the Partners in accordance with their
respective Percentage Interests.
(viii) 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(c) of the Code is required, pursuant to Treasury
Regulation Section 1.704- 1(b)(2)(iv)(m), to be taken into account in
determining Capital Accounts, the amount of such adjustment to the
Capital Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases
such basis), and such item of gain or loss shall be specially allocated
to the Partners in a manner consistent with the manner in which their
Capital Accounts are required to be adjusted pursuant to such Section
of the Treasury Regulations.
(ix) Curative Allocation.
(A) Notwithstanding any other provision of this Section 6.1,
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 6.1. 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 6.1(c)(ix)(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 6.1(c)(ix)(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 6.1(c)(ix)(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 6.1(c)(ix)(A) among the Partners in a manner that is likely
to minimize such economic distortions.
6.2 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 6.1.
(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) 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 6.1.
(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 5.4(d)(i) or 5.4(d)(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 6.2(b)(i)(A); and (B) 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 6.1.
(iii) The General Partner shall apply the principles of Treasury
Regulation Section 1.704-3(d) to eliminate Book-Tax Disparities.
(c) For the proper administration of the Partnership and for the
preservation of uniformity of the Limited Partner Interests (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 704(c) of the Code or (y)
otherwise to preserve or achieve uniformity of the Limited Partner Interests
(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 6.2(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 Limited Partner Interests
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 discretion may determine to depreciate
or amortize the portion of an adjustment under Section 743(b) of the Code
attributable to unrealized appreciation in any Adjusted Property (to the
extent of the unamortized Book-Tax Disparity) using a predetermined rate
derived from the depreciation or amortization method and useful life applied
to the Partnership's common basis of such property, despite any
inconsistency of such approach with Treasury Regulation Section 1.167(c)-
l(a)(6) or Treasury Regulation Section 1.197-2(g)(3). If the General Partner
determines that such reporting position cannot reasonably be taken, the
General Partner may adopt depreciation and amortization conventions under
which all purchasers acquiring Limited Partner Interests in the same month
would receive depreciation and amortization deductions, based upon the same
applicable rate as if they had purchased a direct interest in the
Partnership's property. If the General Partner chooses not to utilize such
aggregate method, the General Partner may use any other reasonable
depreciation and amortization conventions to preserve the uniformity of the
intrinsic tax characteristics of any Limited Partner Interests that would
not have a material adverse effect on the Limited Partners or the Record
Holders of any class or classes of Limited Partner Interests.
(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 6.2, 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, 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 VI shall instead be made to the
beneficial owner of Limited Partner Interests 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.
6.3 Distributions to Record Holders
(a) Within 45 days following the end of each Quarter, an amount equal
to 100% of Available Cash with respect to such Quarter shall, subject to
Section 17-607 of the Delaware Act, be distributed in accordance with this
Article VI by the Partnership to the Partners as of the Record Date selected
by the General Partner in its reasonable discretion in accordance with their
respective Percentage Interests. The immediately preceding sentence shall
not require any distribution of cash if and to the extent such distribution
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 is a party or by which it is bound or its assets are
subject. All distributions required to be made under this Agreement shall be
made subject to Section 17-607 of the Delaware Act.
(b) In the event of the dissolution and liquidation of the
Partnership, all receipts received during or after the Quarter in which the
Liquidation Date occurs, other than from borrowings described in (a)(ii) of
the definition of Available Cash, shall be applied and distributed solely in
accordance with, and subject to the terms and conditions of, Section 12.4.
(c) The General Partner shall have the discretion to treat taxes paid
by the Partnership on behalf of, or amounts withheld with respect to, all or
less than all of the Partners, as a distribution of Available Cash to such
Partners.
(d) Each distribution in respect of a Partnership Interest shall be
paid by the Partnership, directly or through the Transfer Agent or through
any other Person or agent, only to the Record Holder of such Partnership
Interest as of the Record Date set for such 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.
ARTICLE VII
Management and Operation of Business
7.1 Management
(a) The General Partner shall conduct, direct and manage all
activities of the Partnership. Except as otherwise expressly provided in
this Agreement, all management powers over the business and affairs of the
Partnership shall be exclusively vested in the General Partner, and no
Limited Partner or Assignee shall have any management power over the
business and affairs of the Partnership. In addition to the powers now or
hereafter granted a general partner of a limited partnership under
applicable law or which are granted to the General Partner under any other
provision of this Agreement, the General Partner, subject to Section 7.3,
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 2.5
and to effectuate the purposes set forth in Section 2.4, including the
following:
(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, including indebtedness that is convertible into
Partnership Securities, and the incurring of any other obligations;
(ii) the making of tax, regulatory and other filings, or rendering
of periodic or other reports to governmental or other agencies having
jurisdiction over the business or assets of the Partnership;
(iii) the acquisition, disposition, mortgage, pledge, encumbrance,
hypothecation or exchange of any or all of the assets of the
Partnership or the merger or other combination of the Partnership with
or into another Person (the matters described in this clause (iii)
being subject, however, to any prior approval that may be required by
Section 7.3);
(iv) the use of the assets of the Partnership (including cash on
hand) for any purpose consistent with the terms of this Agreement,
including the financing of the conduct of the operations of the
Partnership Group, subject to Section 7.6 the lending of funds to other
Persons (including Genesis OLP and any Group Member), the repayment of
obligations of Genesis OLP and any Group Member and the making of
capital contributions to any Group Member;
(v) the negotiation, execution and performance of any contracts,
conveyances or other instruments (including 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 (including 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 Group and the Partners as it deems necessary or
appropriate;
(ix) the formation of, or acquisition of an interest in, and the
contribution of property and the making of loans to, any further
limited or general partnerships, joint ventures, corporations or other
relationships (including the acquisition of interests in, and the
contributions of property to, Genesis OLP from time to time), subject,
however, to the restrictions set forth in Section 2.4;
(x) the control of any matters affecting the rights and obligations
of the Partnership, including 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 any National
Securities Exchange and the delisting of some or all of the Limited
Partner Interests from, or requesting that trading be suspended on, any
such exchange (subject to any prior approval that may be required under
Section 4.7);
(xiii) the purchase, sale or other acquisition or disposition of
Partnership Securities, and the issuance of additional Partnership
Securities and options, rights, warrants and appreciation rights
relating to Partnership Securities; and
(xiv) the undertaking of any action in connection with the
Partnership's participation as a partner of Genesis OLP.
(b) Notwithstanding any other provision of this Agreement, the Genesis
OLP Partnership Agreement, the Delaware Act or any applicable law, rule or
regulation, each of the Partners and each other Person who may acquire an
interest in the Partnership hereby (i) approves, ratifies and confirms the
execution, delivery and performance by the parties thereto of this
Agreement, the Genesis OLP Partnership Agreement and the other agreements
described in or filed as part of the Proxy Statement; (ii) agrees that the
General Partner (on its own or through any officer of the Partnership) is
authorized to execute, deliver and perform the agreements referred to in
clause (i) of this sentence and the other agreements, acts, transactions and
matters described in or contemplated by the Proxy Statement on behalf of the
Partnership without any further act, approval or vote of the Partners or the
other Persons who may acquire an interest in the Partnership; and (iii)
agrees that the execution, delivery or performance by the General Partner,
any Group Member or any Affiliate of any of them, of this Agreement or any
agreement authorized or permitted under this Agreement (including the
exercise by the General Partner or any Affiliate of the General Partner of
the rights accorded pursuant to Article XV), shall not constitute a breach
by the General Partner of any duty that the General Partner may owe the
Partnership or the Limited Partners or any other Persons under this
Agreement (or any other agreements) or of any duty stated or implied by law
or equity.
7.2 Certificate of Limited Partnership
The General Partner has caused the Certificate of Amended and Restated
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 or other entity 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 3.4(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.
7.3 Restrictions on General Partner's Authority
(a) The General Partner may not, without written approval of the
specific act by holders of all of the Outstanding Limited Partner Interests
or by other written instrument executed and delivered by holders of all of
the Outstanding Limited Partner Interests subsequent to the date of this
Agreement, take any action in contravention of this Agreement, including,
except as otherwise provided in this Agreement (i) committing any act that
would make it impossible to carry on the ordinary business of the
Partnership; (ii) possessing Partnership property, or assigning any rights
in specific Partnership property, for other than a Partnership purpose;
(iii) admitting a Person as a Partner; (iv) amending this Agreement in any
manner; or (v) transferring its General Partner Interest.
(b) Except as provided in Articles XII and XIV, the General Partner
may not sell, exchange or otherwise dispose of all or substantially all of
the assets of the Partnership Group in a single transaction or a series of
related transactions (including by way of merger, consolidation or other
combination) or approve on behalf of the Partnership the sale, exchange or
other disposition of all or substantially all of the assets of the
Partnership, without the approval of holders of a Majority Interest;
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 assets of the
Partnership Group and shall not apply to any forced sale of any or all of
the assets of the Partnership Group pursuant to the foreclosure of, or other
realization upon, any such encumbrance; and provided, further, that this
provision shall not preclude or limit the ability of Genesis OLP to sell,
exchange or otherwise dispose of all of the assets of Genesis OLP in a
single transaction or a series of related transactions that is approved by
the limited partners of Genesis OLP as provided in Section 7.3(b) of the
Genesis OLP Partnership Agreement.
(c) Without the approval of holders of a Majority Interest, the
General Partner shall not, on behalf of the Partnership, (i) consent to any
amendment to the Genesis OLP Partnership Agreement or, except as expressly
permitted by Section 7.9(d), take any action permitted to be taken by a
partner of Genesis OLP, in either case, that would have a material adverse
effect on the Partnership as a partner of Genesis OLP or (ii) except as
permitted under Sections 4.6, 11.1 and 11.2, elect or cause the Partnership
to elect a successor general partner of Genesis OLP.
7.4 Reimbursement of the General Partner
(a) Except as provided in this Section 7.4 and elsewhere in this
Agreement or in the Genesis OLP Partnership Agreement, the General Partner
shall not be compensated for its services as general partner of any Group
Member.
(b) The General Partner shall be reimbursed on a monthly basis, or
such other reasonable 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 salary, bonus, incentive
compensation and other amounts paid to any Person, including Affiliates of
the General Partner, 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 expenses allocated to the
General Partner by its Affiliates). The General Partner shall determine the
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 7.4 shall be in addition to any reimbursement to
the General Partner as a result of indemnification pursuant to Section 7.7.
(c) The General Partner, in its sole discretion and without the
approval of the Limited Partners (who shall have no right to vote in respect
thereof), may propose and adopt on behalf of the Partnership employee
benefit plans, employee programs and employee practices (including plans,
programs and practices involving the issuance of Partnership Securities or
options to purchase Partnership Securities), or cause the Partnership to
issue Partnership Securities pursuant to any employee benefit plan, employee
program or employee practice maintained or sponsored by the General Partner
or any of its Affiliates, in each case for the benefit of employees of the
General Partner, any Group Member or any Affiliate, or any of them, in
respect of services performed, directly or indirectly, for the benefit of
the Partnership Group. The Partnership agrees to issue and sell to the
General Partner or any of its Affiliates any Partnership Securities that the
General Partner or such Affiliate is obligated to provide to any employees
pursuant to any such employee benefit plans, employee programs or employee
practices. Expenses incurred by the General Partner in connection with any
such plans, programs and practices (including the net cost to the General
Partner or such Affiliate of Partnership Securities purchased by the General
Partner or such Affiliate from the Partnership to fulfill options or awards
under such plans, programs and practices) shall be reimbursed in accordance
with Section 7.4(b). Any and all obligations of the General Partner under
any employee benefit plans, employee programs or employee practices adopted
by the General Partner as permitted by this Section 7.4(c) shall constitute
obligations of the General Partner hereunder and shall be assumed by any
successor General Partner approved pursuant to Section 11.1 or 11.2 or the
transferee of or successor to all of the General Partner's General Partner
Interest pursuant to Section 4.6.
7.5 Outside Activities
(a) After the Restructuring Closing Date, the General Partner, for so
long as it is the general partner of the Partnership (i) agrees that its
sole business will be to act as a general partner or managing member, as the
case may be, of the Partnership, Genesis OLP and any other partnership or
limited liability company of which the Partnership or Genesis OLP is,
directly or indirectly, a partner or member and to undertake activities that
are ancillary or related thereto (including being a limited partner or
member in the Partnership or any such other partnership or limited liability
company) and (ii) shall not, directly or indirectly, engage in any business
or activity or incur any debts or liabilities except in connection with or
incidental to (A) its performance as general partner or managing member, as
the case may be, of one or more Group Members or as described in or
contemplated by the Registration Statement or the Proxy Statement or (B) the
acquiring, owning or disposing of debt or equity securities of any Group
Member.
(b) Salomon, Basis Petroleum, Inc. and ▇▇▇▇▇▇ continue to be parties
to the Non-Competition Agreement, which agreement sets forth certain
restrictions on their ability to engage in the business of (i) crude oil
gathering at the wellhead in the states of Alabama, Florida, Kansas,
Louisiana, Mississippi, New Mexico, Oklahoma or Texas, or any states
contiguous to such states, and (ii) transporting for third parties crude oil
by pipeline along the routes of the Partnership's crude oil pipelines owned
as of the Initial Closing Date. The Non-Competition Agreement remains in
effect in accordance with its terms.
(c) Except as specifically restricted by Section 7.5(a) and the Non-
Competition Agreement, each Indemnitee (other than the General Partner)
shall have the right to engage in businesses of every type and description
and other activities for profit and to engage in and possess an interest in
other business ventures of any and every type or description, whether in
businesses engaged in or anticipated to be engaged in by any Group Member,
independently or with others, including business interests and activities in
direct competition with the business and activities of any Group Member, and
none of the same shall constitute a breach of this Agreement or any duty
express or implied by law to any Group Member or any Partner. Neither any
Group Member, any Limited Partner nor any other Person shall have any rights
by virtue of this Agreement, the Genesis OLP Partnership Agreement or the
partnership relationship established hereby or thereby in any business
ventures of any Indemnitee.
(d) Subject to the terms of Sections 7.5(a), 7.5(b) and 7.5(c) and the
Non-Competition Agreement, but otherwise notwithstanding anything to the
contrary in this Agreement, (i) the engaging in competitive activities by
any Indemnitees (other than the General Partner) in accordance with the
provisions of this Section 7.5 is hereby approved by the Partnership and all
Partners and (ii) it shall be deemed not to be a breach of the General
Partner's fiduciary duty or any other obligation of any type whatsoever of
the General Partner for the Indemnitees (other than the General Partner) to
engage in such business interests and activities in preference to or to the
exclusion of the Partnership, and the General Partner and the Indemnitees
shall have no obligation to present business opportunities to the
Partnership.
(e) The General Partner and any of its Affiliates may acquire
Partnership Securities in addition to those heretofore acquired and, except
as otherwise provided in this Agreement, shall be entitled to exercise all
rights relating to such Partnership Securities.
(f) The term "Affiliates" when used in Section 7.5 with respect to the
General Partner shall not include any Group Member or any Subsidiary of the
Group Member.
7.6 Loans from the General Partner; Loans or Contributions from the
Partnership; Contracts with Affiliates; Certain Restrictions on the
General Partner
(a) The General Partner or any Affiliate thereof may lend to any Group
Member, and any Group Member may borrow from the General Partner or any of
its Affiliates, funds needed or desired by the Group Member for such periods
of time and in such amounts as the General Partner may determine; provided,
however, that in any 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 or impose terms less favorable to the borrowing
party than would be charged or imposed on the borrowing party by unrelated
lenders on comparable loans made on an arm's-length basis (without reference
to the lending party's financial abilities or guarantees). 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 7.6(a) and Section
7.6(b), the term "Group Member" shall include any Affiliate of a Group
Member that is controlled by the Group Member. No Group Member may lend
funds to the General Partner or any of its Affiliates (other than another
Group Member).
(b) The Partnership may lend or contribute to any Group Member, and
any Group Member may borrow from the Partnership, funds on terms and
conditions established in the sole discretion of the General Partner;
provided, however, that the Partnership may not charge the Group Member
interest at a rate less than the rate that would be charged to the Group
Member (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 any Group Member or
any other Person.
(c) The General Partner may itself, or may enter into an agreement
with any of its Affiliates to, render services to a Group Member or to the
General Partner in the discharge of its duties as general partner of the
Partnership. Any services rendered to a Group Member 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
7.6(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 Group 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 Group), is equitable to the Partnership
Group. The provisions of Section 7.4 shall apply to the rendering of
services described in this Section 7.6(c).
(d) The Partnership Group may transfer assets to joint ventures, other
partnerships, corporations, limited liability companies or other business
entities in which it is or thereby becomes a participant upon such terms and
subject to such conditions as are consistent with this Agreement and
applicable law.
(e) Neither the General Partner nor any of its Affiliates shall sell,
transfer or convey any property to, or purchase any property from the
Partnership, directly or indirectly, except pursuant to transactions that
are fair and reasonable to the Partnership; provided, however, that the
requirements of this Section 7.6(e) shall be deemed to be satisfied as to
(i) the transactions effected pursuant to Sections 5.2 and 5.3 of the
Previous Agreement, the Conveyance Agreement and any other transactions
described in or contemplated by the Registration Statement or the Proxy
Statement, (ii) any transaction approved by Special Approval, (iii) any
transaction, the terms of which are no less favorable to the Partnership
than those generally being provided to or available from unrelated third
parties, or (iv) any transaction that, taking into account the totality of
the relationships between the parties involved (including other transactions
that may be particularly favorable or advantageous to the Partnership), is
equitable to the Partnership. With respect to any contribution of assets to
the Partnership in exchange for Partnership Securities, the Audit Committee,
in determining whether the appropriate number of Partnership Securities are
being issued, may take into account, among other things, the fair market
value of the assets, the liquidated and contingent liabilities assumed, the
tax basis in the assets, the extent to which tax-only allocations to the
transferor will protect the existing partners of the Partnership against a
low tax basis, and such other factors as the Audit Committee deems relevant
under the circumstances.
(f) The General Partner and its Affiliates will have no obligation to
permit any Group Member to use any facilities or assets of the General
Partner and its Affiliates, except as may be provided in contracts entered
into from time to time specifically dealing with such use, nor shall there
be any obligation on the part of the General Partner or its Affiliates to
enter into such contracts.
(g) Without limitation of Sections 7.6(a) through 7.6(f), and
notwithstanding anything to the contrary in this Agreement, the existence of
the conflicts of interest described in the Registration Statement or the
Proxy Statement are hereby approved by all Partners.
7.7 Indemnification
(a) To the fullest extent permitted by law but subject to the
limitations expressly provided in this Agreement, all Indemnitees shall be
indemnified and held harmless by the Partnership from and against any and
all losses, claims, damages, liabilities, joint or several, expenses
(including legal fees and expenses), judgments, fines, penalties, interest,
settlements or 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 an
Indemnitee; provided, that in each case the Indemnitee acted in good faith
and in a manner that such Indemnitee reasonably believed to be in, or not
opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful. 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 7.7 shall be made only out of the assets of the Partnership, it
being agreed that the General Partner shall not be personally liable for
such indemnification and shall have no obligation to contribute or loan any
monies or property to the Partnership to enable it to effectuate such
indemnification.
(b) To the fullest extent permitted by law, expenses (including legal
fees and expenses) incurred by an Indemnitee who is indemnified pursuant to
Section 7.7(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 any 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 7.7.
(c) The indemnification provided by this Section 7.7 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 Limited
Partner Interests, as a matter of law or otherwise, both as to actions in
the Indemnitee's capacity as an Indemnitee and as to actions in any other
capacity (including any capacity under the Underwriting Agreement dated
November 26, 1996 among the Partnership, Genesis OLP, and the underwriters
and other parties named therein), 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, its Affiliates 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 or such Person's activities on behalf of the
Partnership, 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 7.7, 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 7.7(a); and
action taken or omitted by it with respect to any 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 7.7 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the
transaction was otherwise permitted by the terms of this Agreement.
(h) The provisions of this Section 7.7 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall
not be deemed to create any rights for the benefit of any other Persons.
(i) No amendment, modification or repeal of this Section 7.7 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 obligations of the Partnership to indemnify any such
Indemnitee under and in accordance with the provisions of this Section 7.7
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.
7.8 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 Partnership Securities, 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 7.1(a), the General Partner may exercise any of the powers
granted to it by this Agreement and perform any of the duties imposed upon
it hereunder either directly or by or through its agents, and the General
Partner shall not be responsible for any misconduct or negligence on the
part of any such agent appointed by the General Partner in good faith.
(c) To the extent that, at law or in equity, an Indemnitee has duties
(including fiduciary duties) and liabilities relating thereto to the
Partnership or to the Partners, the General Partner and any other Indemnitee
acting in connection with the Partnership's business or affairs shall not be
liable to the Partnership or to any Partner for its good faith reliance on
the provisions of this Agreement. The provisions of this Agreement, to the
extent that they restrict or otherwise modify the duties and liabilities of
an Indemnitee otherwise existing at law or in equity, are agreed by the
Partners to replace such other duties and liabilities of such Indemnitee.
(d) Any amendment, modification or repeal of this Section 7.8 or any
provision hereof shall be prospective only and shall not in any way affect
the limitations on the liability of the Indemnitees under this Section 7.8
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.
7.9 Resolution of Conflicts of Interest
(a) Unless otherwise expressly provided in this Agreement or the
Genesis OLP Partnership Agreement, whenever a potential conflict of interest
exists or arises between the General Partner or any of its Affiliates, on
the one hand, and the Partnership, Genesis OLP, any Partner, or any Assignee
on the other, any resolution or course of action by the General Partner or
its Affiliates 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 Genesis OLP Partnership Agreement, of any agreement
contemplated herein, 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 such resolution. 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 (as
long as the material facts known to the General Partner or any of its
Affiliates regarding any proposed transaction were disclosed to the Audit
Committee at the time it gave its approval), (ii) on terms no less favorable
to the Partnership than those generally being provided to or available from
unrelated third parties or (iii) fair to the Partnership, taking into
account the totality of the relationships between the parties involved
(including other transactions that may be particularly favorable or
advantageous to the Partnership). The General Partner may also adopt a
resolution or course of action that has not received Special Approval. The
General Partner (including the Audit Committee in connection with Special
Approval) shall be authorized in connection with its determination of what
is "fair and reasonable" to the Partnership and in connection with its
resolution of any conflict of interest to consider (A) the relative
interests of any party to such conflict, agreement, transaction or situation
and the benefits and burdens relating to such interest; (B) any customary or
accepted industry practices and any customary or historical dealings with a
particular Person; (C) any applicable generally accepted accounting
practices or principles; and (D) such additional factors as the General
Partner (including the 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 the Audit Committee) to
consider the interests of any Person other than the Partnership. In the
absence of bad faith by the General Partner, the resolution, action or terms
so made, taken or provided by the General Partner with respect to such
matter shall not constitute a breach of this Agreement or any other
agreement contemplated herein or a breach of any standard of care or duty
imposed herein or therein or, to the extent permitted by law, 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 "necessary or advisable" or
under a grant of similar authority or latitude, except as otherwise provided
herein, 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, Genesis OLP, 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 Genesis OLP Partnership
Agreement, any other agreement contemplated hereby or under the Delaware Act
or any other law, rule or regulation. In addition, any actions taken by the
General Partner or such Affiliate consistent with the standards of
"reasonable discretion" set forth in the definition of Available Cash 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
Partnership Group other than in the ordinary course of business. No
borrowing by any Group Member 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 or the Assignees by reason of the
fact that the purpose or effect of such borrowing is directly or indirectly
to enable Genesis OLP to make Incentive Compensation Payments to the General
Partner.
(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 a Group Member, to approve of
actions by the general partner of such Group Member similar to those actions
permitted to be taken by the General Partner pursuant to this Section 7.9.
7.10 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 an Opinion of Counsel) of such Persons
as to matters that the General Partner reasonably believes to be within such
Person's professional or expert competence shall be conclusively presumed to
have been done or omitted in good faith and in accordance with such opinion.
(c) The General Partner shall have the right, in respect of any of its
powers or obligations hereunder, to act through any of its duly authorized
officers, a duly appointed attorney or attorneys-in-fact or the duly
authorized officers of the Partnership.
(d) Any standard of care and duty imposed by this Agreement or under
the Delaware Act or any applicable law, rule or regulation shall be
modified, waived or limited, to the extent permitted by law, 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.
7.11 Purchase or Sale of Partnership Securities
The General Partner may cause the Partnership to purchase or otherwise
acquire Partnership Securities. As long as Partnership Securities are held
by any Group Member, such Partnership Securities shall not be considered
Outstanding for any purpose, except as otherwise provided herein. The
General Partner and any Affiliate of the General Partner may also purchase
or otherwise acquire and sell or otherwise dispose of Partnership Securities
for its own account, subject to the provisions of Articles IV and X.
7.12 Registration Rights of the General Partner and its Affiliates
(a) If (i) the General Partner or any Affiliate of the General Partner
(including for purposes of this Section 7.12, any Person that is an
Affiliate of the General Partner at the date hereof notwithstanding that it
may later cease to be an Affiliate of the General Partner) holds 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 Partnership
Securities (the "Holder") to dispose of the number of Partnership Securities
it desires to sell at the time it desires to do so without registration
under the Securities Act, then upon the request of the General Partner or
any of its Affiliates, the Partnership shall file with the Commission as
promptly as practicable after receiving such request, and use all reasonable
efforts to cause to become effective and remain effective for a period of
not less than six months following its effective date or such shorter period
as shall terminate when all Partnership Securities covered by such
registration statement have been sold, a registration statement under the
Securities Act registering the offering and sale of the number of
Partnership Securities specified by the Holder; provided, however, that the
Partnership shall not be required to effect more than three registrations
pursuant to this Section 7.12(a); and provided further, however, that if the
Audit Committee determines in its good faith judgment that a postponement of
the requested registration for up to six months would be in the best
interests of the Partnership and its Partners due to a pending transaction,
investigation or other event, the filing of such registration statement or
the effectiveness thereof may be deferred for up to six months, but not
thereafter. In connection with any registration pursuant to the immediately
preceding sentence, the Partnership shall promptly prepare and file (x) such
documents as may be necessary to register or qualify the Partnership
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 solely as a result of such
registration and (y) such documents as may be necessary to apply for listing
or to list the Partnership 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
Partnership Securities in such states. Except as set forth in Section
7.12(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 Partnership Securities
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 Partnership Securities held by the Holder in such
registration statement as the Holder shall request. If the proposed offering
pursuant to this Section 7.12(b) shall be an underwritten offering, then, in
the event that the managing underwriter or managing underwriters of such
offering advise the Partnership and the Holder in writing that in their
opinion the inclusion of all or some of the Holder's Partnership Securities
would adversely and materially affect the success of the offering, the
Partnership shall include in such offering only that number or amount, if
any, of Partnership Securities held by the Holder which, in the opinion of
the managing underwriter or managing underwriters, will not so adversely and
materially affect the offering. Except as set forth in Section 7.12(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 7.12, the Partnership shall provide
indemnification, representations, covenants, opinions and other assurance to
the underwriters in form and substance reasonably satisfactory to such
underwriters. Further, in addition to and not in limitation of the
Partnership's obligation under Section 7.7, 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 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 7.12(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 Partnership Securities were
registered under the Securities Act or any state securities or Blue Sky
laws, in any preliminary prospectus (if used prior to the effective date of
such registration statement), or in any summary or final prospectus or in
any amendment or supplement thereto (if used during the period the
Partnership is required to keep the registration statement current), or
arising out of, based upon or resulting from the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements made therein not misleading; provided,
however, that the Partnership shall not be liable to any Indemnified Person
to the extent that any such claim arises out of, is based upon or results
from an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, such preliminary, summary or
final prospectus or such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Partnership by or on
behalf of such Indemnified Person specifically for use in the preparation
thereof.
(d) The provisions of Section 7.12(a) and 7.12(b) shall continue to be
applicable with respect to the General Partner (and any of the General
Partner's Affiliates) after it ceases to be a General 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 Partnership Securities with respect to which it has
requested during such two-year period inclusion in a registration statement
otherwise filed or that a registration statement be filed; provided,
however, that the Partnership shall not be required to file successive
registration statements covering the same Partnership Securities for which
registration was demanded during such two-year period. The provisions of
Section 7.12(c) shall continue in effect thereafter.
(e) Any request to register Partnership Securities pursuant to this
Section 7.12 shall (i) specify the Partnership Securities intended to be
offered and sold by the Person making the request, (ii) express such
Person's present intent to offer such shares for distribution, (iii)
describe the nature or method of the proposed offer and sale of Partnership
Securities, and (iv) contain the undertaking of such Person to provide all
such information and materials and take all action as may be required in
order to permit the Partnership to comply with all applicable requirements
in connection with the registration of such Partnership Securities.
7.13 Reliance by Third Parties
Notwithstanding anything to the contrary in this Agreement, any Person
dealing with the Partnership shall be entitled to assume that the General
Partner and any officer of the General Partner authorized by the General
Partner to act on behalf of and in the name of the Partnership has full
power and authority to encumber, sell or otherwise use in any manner any and
all assets of the Partnership and to enter into any authorized contracts on
behalf of the Partnership, and such Person shall be entitled to deal with
the General Partner or any such officer as if it were the Partnership's sole
party in interest, both legally and beneficially. Each Limited Partner
hereby waives any and all defenses or other remedies that may be available
against such Person to contest, negate or disaffirm any action of the
General Partner or any such officer in connection with any such dealing. In
no event shall any Person dealing with the General Partner or any such
officer or its representatives be obligated to ascertain that the terms of
the Agreement have been complied with or to inquire into the necessity or
expedience of any act or action of the General Partner or any such officer
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.
ARTICLE VIII
Books, Records, Accounting and Reports
8.1 Records and Accounting
The General Partner shall keep or cause to be kept at the principal
office of the Partnership, appropriate books and records with respect to the
Partnership's business, including all books and records necessary to provide
to the Limited Partners any information required to be provided pursuant to
Section 3.4(a). Any books and records maintained by or on behalf of the
Partnership in the regular course of its business, including the record of
the Record Holders and Assignees of Units or other Partnership Securities,
books of account and records of Partnership proceedings, may be kept on, or
be in the form of, computer disks, hard drives, punch cards, magnetic tape,
photographs, micrographics or any other information storage device;
provided, that the books and records so maintained are convertible into
clearly legible written form within a reasonable period of time. The books
of the Partnership shall be maintained, for financial reporting purposes, on
an accrual basis in accordance with U.S. GAAP.
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 or furnished to each Record Holder of a Limited Partner
Interest as of a date selected by the General Partner in its discretion, an
annual report containing financial statements of the Partnership for such
fiscal year of the Partnership, presented in accordance with U.S. GAAP,
including a balance sheet and statements of operations, Partnership equity
and cash flows, such statements to be audited by a firm of independent
public accountants selected by the General Partner.
(b) As soon as practicable, but in no event later than 90 days after
the close of each Quarter except the last Quarter of each year, the General
Partner shall cause to be mailed or furnished to each Record Holder of a
Limited Partner Interest, as of a date selected by the General Partner in
its 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 Limited
Partner Interests are listed for trading, or as the General Partner
determines to be necessary or appropriate.
ARTICLE IX
Tax Matters
9.1 Tax Returns and Information
The Partnership shall timely file all returns of the Partnership that
are required for federal, state and local income tax purposes on the basis
of the accrual method and a taxable year ending on December 31. The tax
information reasonably required by Record Holders for federal and state
income tax reporting purposes with respect to a taxable year shall be
furnished to them within 90 days of the close of the calendar year in which
the Partnership's taxable year ends. 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.
9.2 Tax Elections
(a) The Partnership has made the election under Section 754 of the
Code in accordance with applicable regulations thereunder, subject to the
reservation of the right to seek to revoke any such election upon the
General Partner's determination that such revocation is in the best
interests of the Limited Partners. Notwithstanding any other provision
herein contained, for the 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 a
Limited Partner Interest will be deemed to be the lowest quoted closing
price of such Limited Partner Interests on any National Securities Exchange
on which such Limited Partner Interests are traded during the calendar month
in which such transfer is deemed to occur pursuant to Section 6.2(g) without
regard to the actual price paid by such transferee.
(b) The Partnership has elected to deduct expenses incurred in
organizing the Partnership ratably over a sixty-month period as provided in
Section 709 of the Code.
(c) Except as otherwise provided herein, the General Partner shall
determine whether the Partnership should make any other elections permitted
by the Code.
9.3 Tax Controversies
Subject to the provisions hereof, the General Partner is designated as
the Tax Matters Partner (as defined in 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 resulting administrative and judicial proceedings,
and to expend Partnership funds for professional services and costs
associated therewith. Each Partner 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.
9.4 Withholding
Notwithstanding any other provision of this Agreement, the General
Partner is authorized to take any action that it determines in its
discretion to be necessary or appropriate to cause the 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 or elects 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 may at the discretion of the
General Partner be treated by the Partnership as a distribution of cash
pursuant to Section 6.3 in the amount of such withholding from such Partner.
ARTICLE X
Admission of Partners
10.1 Admission of Substituted Limited Partner
By transfer of a Limited Partner Interest in accordance with Article
IV, 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 representing a Limited Partner Interest 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 Limited Partner
Interests. Each transferee of a Limited Partner Interest (including any
nominee holder or an agent acquiring such Limited Partner Interest for the
account of another Person) who executes and delivers a Transfer Application
shall, by virtue of such execution and delivery, be an Assignee and be
deemed to have applied to become a Substituted Limited Partner with respect
to the Limited Partner Interest 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 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 liquidating distributions, of the
Partnership. With respect to voting rights attributable to Limited Partner
Interests 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 Limited Partner Interests on any matter,
vote such Limited Partner Interests at the written direction of the Assignee
who is the Record Holder of such Limited Partner Interests. If no such
written direction is received, such Limited Partner Interests will not be
voted. An Assignee shall have no other rights of a Limited Partner.
10.2 Admission of Successor General Partner
A successor General Partner approved pursuant to Section 11.1 or 11.2
or the transferee of or successor to all of the General Partner Interest
pursuant to Section 4.6 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 11.1 or 11.2 or the transfer of the General
Partner Interest pursuant to Section 4.6; provided, however, that no such
successor shall be admitted to the Partnership until compliance with the
terms of Section 4.6 has occurred and such successor has executed and
delivered such other documents or instruments as may be required to effect
such admission. Any such successor shall, subject to the terms hereof, carry
on the business of the Group Members without dissolution.
10.3 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 in exchange for Limited Partner Interests 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 the power of attorney granted in Section 2.6, and
(ii) such other documents or instruments as may be required in the
discretion of the General Partner to effect such Person's admission as an
Additional Limited Partner.
(b) Notwithstanding anything to the contrary in this Section 10.4, no
Person shall be admitted as an Additional Limited Partner without the
consent of the General Partner, which consent may be given or withheld in
the General Partner's discretion. The admission of any Person as an
Additional Limited Partner shall become effective on the date upon which the
name of such Person is recorded as such in the books and records of the
Partnership, following the consent of the General Partner to such admission.
10.4 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 to reflect such admission and,
if necessary, to prepare as soon as practicable an amendment to this
Agreement and, if required by law, the General Partner shall prepare and
file an amendment to the Certificate of Limited Partnership, and the General
Partner may for this purpose, among others, exercise the power of attorney
granted pursuant to Section 2.6.
ARTICLE XI
Withdrawal or Removal of Partners
11.1 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 Limited Partners (and it shall be
deemed that the General Partner has withdrawn pursuant to this Section
11.1(a)(i) if the General Partner voluntarily withdraws as a general
partner of Genesis OLP);
(ii) the General Partner transfers all of its General Partner
Interest pursuant to Section 4.6;
(iii) the General Partner is removed pursuant to Section 11.2;
(iv) the General Partner (A) makes a general assignment for the
benefit of creditors; (B) files a voluntary bankruptcy petition for
relief under Chapter 7 of the United States Bankruptcy Code; (C) files
a petition or answer seeking for itself a liquidation, dissolution or
similar relief (but not a reorganization) 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
11.1(a)(iv); or (E) seeks, consents to or acquiesces in the appointment
of a trustee (but not a debtor in possession), receiver or liquidator
of the General Partner or of all or any substantial part of its
properties;
(v) a final and non-appealable order of relief under Chapter 7 of
the United States Bankruptcy Code is entered by a court with
appropriate jurisdiction pursuant to a voluntary or involuntary
petition by or against the General Partner; or
(vi) (A) in the event the General Partner is a corporation, 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; (B) in the event
the General Partner is a partnership or a limited liability company,
the dissolution and commencement of winding up of the General Partner;
(C) in the event the General Partner is acting in such capacity by
virtue of being a trustee of a trust, the termination of the trust; (D)
in the event the General Partner is a natural person, his death or
adjudication of incompetency; and (E) otherwise in the event of the
termination of the General Partner.
If an Event of Withdrawal specified in Section 11.1(a)(iv), (v) or (vi)(A),
(B), (C) or (E) 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
11.1 shall result in the withdrawal of the General Partner from the
Partnership.
(b) Withdrawal of the General Partner from the Partnership upon the
occurrence of an Event of Withdrawal shall not constitute a breach of this
Agreement under the following circumstances: (i) at any time during the
period beginning on the Initial Closing Date and ending at 12:00 midnight,
Eastern Standard Time, on December 31, 2006, the General Partner voluntarily
withdraws by giving at least 90 days' advance notice of its intention to
withdraw to the Limited Partners; provided that prior to the effective date
of such withdrawal, the withdrawal is approved by the holders of a Majority
Interest 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 any limited partner of
Genesis OLP or cause the Partnership or Genesis OLP to be treated as an
association taxable as a corporation or otherwise to be taxed as an entity
for federal income tax purposes (to the extent not previously treated as
such); (ii) at any time after 12:00 midnight, Eastern Standard Time, on
December 31, 2006, 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 the General Partner pursuant to Section
11.1(a)(ii) or is removed pursuant to Section 11.2; or (iv) notwithstanding
clause (i) of this sentence, at any time that the General Partner
voluntarily withdraws by giving at least 90 days' advance notice of its
intention to withdraw to the Limited Partners, such withdrawal to take
effect on the date specified in the notice, if at the time such notice is
given one Person and its Affiliates (other than the General Partner and its
Affiliates) own beneficially or of record or control at least 50% of the
Outstanding Limited Partner Interests. 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 or
managing member of the other Group Members. If the General Partner gives a
notice of withdrawal pursuant to Section 11.1(a)(i), the holders of a
Majority Interest, 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 a successor general partner or
managing member of the other Group Members of which the General Partner is a
general partner. 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 12.1. Any
successor General Partner elected in accordance with the terms of this
Section 11.1 shall be subject to the provisions of Section 10.3.
11.2 Removal of the General Partner
The General Partner may be removed with or without Cause. If Cause
exists the General Partner may be removed if such removal is approved by the
holders of a Two-Thirds Interest (including Limited Partner Interests held by
the General Partner and its Affiliates). Any such action by such holders for
removal of the General Partner with Cause must also provide for the election
of a successor General Partner by the holders of a Two-Thirds Interest
(including Limited Partner Interests held by the General Partner and its
Affiliates). If such removal is without Cause, such removal must be approved
by the holders of a Majority Interest (excluding any Limited Partner
Interests held by the General Partner and its Affiliates). Any such action
by such holders for removal of the General Partner without Cause must also
provide for the election of a successor General Partner by the holders of a
Majority Interest (excluding any Limited Partner Interests held by the
General Partner and its Affiliates). If it is proposed that the removal is
without Cause, and an Affiliate of Denbury Resources Inc., a Delaware
corporation ("Denbury"), or Denbury is the General Partner proposed to be
removed and not proposed as a successor General Partner, then any such action
for removal must also provide for Denbury to be granted an option immediately
upon the effectiveness of the removal (the option to be exercisable for a
period of 45 days following the determination of fair market value by
independent appraisal in the manner set forth below) to purchase all of the
Partnership's then existing right, title and interest, if any, in the
Partnership's Mississippi pipeline system, with a current termination point
(as of July 31, 2002) at Maryland, Louisiana, and its associated real and
personal property, easements, rights of way and storage facilities, at 110%
of its fair market value (as determined by independent appraisal in the
manner set forth below). Such option is to contain additional terms and
conditions as reasonably acceptable to Denbury and the independent directors
of the General Partner. Any removal of the General Partner shall be
effective immediately following the admission of a successor General Partner,
subject to the provisions of Section 10.2. Such removal shall also
automatically constitute the removal of the General Partner as general
partner of the other Group Members of which the General Partner is a general
partner. If a Person is elected as a successor General Partner in accordance
with the terms of this Section 11.2, such Person shall, upon admission
pursuant to Section 10.2, automatically become a successor general partner or
managing member of the other Group Members of which the General Partner is a
general partner. The right of the Limited Partners to remove the General
Partner pursuant to this Section 11.2 shall not exist or be exercised unless
the Partnership has received an opinion opining as to the matters covered by
a Withdrawal Opinion of Counsel. Any successor General Partner elected in
accordance with the terms of this Section 11.2 shall be subject to the
provisions of Section 10.2.
Upon removal of Denbury or its Affiliate as General Partner without
Cause, and the granting of the option to Denbury as set forth above in the
sixth sentence of this Section 11.2 and the election of the successor General
Partner that is not Denbury or an Affiliate of Denbury, two independent
appraisers shall be promptly selected, one appraiser to be selected by the
successor General Partner and the other appraiser to be selected by Denbury.
The fair market value of the Mississippi pipeline system will be determined
by the agreement of these two independent appraisers acting reasonably and in
good faith. In the event the two appraisers so selected do not reach an
agreement as to the fair market value within 45 days following the selection
of the second appraiser, the fair market value shall be the mid-point between
each of the values determined reasonably and in good faith by the two
appraisers.
11.3 Interest of Departing Partner and Successor General Partner
(a) In the event of the withdrawal of the General Partner under
circumstances where such withdrawal does not violate this Agreement, if a
successor General Partner is elected in accordance with the terms of Section
11.1 or 11.2, the Departing Partner shall have the option exercisable prior
to the effective date of the departure of such Departing Partner to require
its successor to purchase its General Partner Interest and its partnership
interest as a general partner or managing member in the other Group Members
and if the General Partner has delivered a Conversion Election as provided
in Section 7.13 of the Genesis OLP Partnership Agreement, its right to
participate in distributions as provided in Section 7.13 of the Genesis OLP
Partnership Agreement (collectively, the "Combined Interest") in exchange
for an amount in cash equal to the fair market value of such Combined
Interest, such amount to be determined and payable as of the effective date
of its departure. If the General Partner is removed by the Partners under
circumstances where Cause exists or if the General Partner withdraws under
circumstances where such withdrawal violates this Agreement or the Genesis
OLP Partnership Agreement, and if a successor General Partner is elected in
accordance with the terms of Section 11.1 or 11.2, such successor shall have
the option, exercisable prior to the effective date of the departure of such
Departing Partner, to purchase the Combined Interest of the Departing
Partner for such fair market value of such Combined Interest. In either
event, the Departing Partner shall be entitled to receive all reimbursements
due such Departing Partner pursuant to Section 7.4, including any employee-
related liabilities (including severance liabilities), incurred in
connection with the termination of any employees employed by the General
Partner for the benefit of the Partnership or the other Group Members.
For purposes of this Section 11.3(a), the fair market value of the
Departing Partner's Combined Interest shall be determined by agreement
between the Departing Partner and its successor or, failing agreement within
30 days after the effective date of such Departing Partner's departure, by
an independent investment banking firm or other independent expert selected
by the Departing Partner and its successor, which, in turn, may rely on
other experts, and the determination of which shall be conclusive as to such
matter. If such parties cannot agree upon one independent investment banking
firm or other independent expert within 45 days after the effective date of
such departure, then the Departing Partner shall designate an independent
investment banking firm or other independent expert, the Departing Partner's
successor shall designate an independent investment banking firm or other
independent expert, and such firms or experts shall mutually select a third
independent investment banking firm or independent expert, which third
independent investment banking firm or other independent expert shall
determine the fair market value of the Combined Interest. In making its
determination, such third independent investment banking firm or other
independent expert may consider the then current trading price of Common
Units on any National Securities Exchange on which Common Units are then
listed, the value of the Partnership's assets, the rights and obligations of
the General Partner and other factors it may deem relevant.
(b) If the Combined Interest is not purchased in the manner set forth
in Section 11.3(a), the Departing Partner will have the right to convert the
Combined Interest into Common Units or to receive cash from the Partnership
in exchange for such Combined Interest. The Departing Partner's 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 11.3(a), without reduction in such Combined Interest (but subject
to proportionate dilution by reason of the admission of its successor). Any
successor General Partner shall indemnify the Departing Partner as to all
debts and liabilities of the Partnership arising on or after the date on
which the Departing Partner becomes a Limited Partner. For purposes of this
Agreement, conversion of the General Partner's Combined Interest to Common
Units will be characterized as if the General Partner contributed its
Combined Interest to the Partnership in exchange for the newly issued Common
Units.
(c) If a successor General Partner is elected in accordance with the
terms of Section 11.1 or 11.2 and the option described in Section 11.3(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 Partnership cash in the amount necessary to acquire a General Partner
Interest equal to the General Partner Interest of the Departing Partner. In
such event, such successor General Partner shall 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.
11.4 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 Limited Partner Interest becomes a Record Holder of the Limited
Partner Interest so transferred, such transferring Limited Partner shall
cease to be a Limited Partner with respect to the Limited Partner Interest
so transferred.
ARTICLE XII
Dissolution and Liquidation
12.1 Dissolution
The Partnership shall not be dissolved by the admission of Substituted
Limited Partners or Additional Limited Partners or by the admission of a
successor General Partner in accordance with the terms of this Agreement.
Upon the removal or withdrawal of the General Partner, if a successor
General Partner is elected pursuant to Section 11.1 or 11.2, the Partnership
shall not be dissolved and such successor General Partner shall continue the
business of the Partnership. The Partnership shall dissolve, and (subject to
Section 12.2) its affairs shall be wound up, upon:
(a) the expiration of its term as provided in Section 2.7;
(b) an Event of Withdrawal of the General Partner as provided in
Section 11.1(a) (other than Section 11.1(a)(ii)), unless a successor is
elected and an Opinion of Counsel is received as provided in Section 11.1(b)
or 11.2 and such successor is admitted to the Partnership pursuant to
Section 10.3;
(c) an election to dissolve the Partnership by the General Partner
that is approved by the holders of a Majority Interest;
(d) the entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the Delaware Act;
(e) the dissolution of Genesis OLP; or
(f) the sale of all or substantially all of the assets and properties
of the Partnership Group.
12.2 Continuation of the Business of the Partnership After Dissolution
Upon (a) dissolution of the Partnership following an Event of
Withdrawal caused by the withdrawal or removal of the General Partner as
provided in Section 11.1(a)(i) or (iii) and the failure of the Partners to
select a successor to such Departing Partner pursuant to Section 11.1 or
11.2, then within 90 days thereafter, or (b) dissolution of the Partnership
upon an event constituting an Event of Withdrawal as defined in Section
11.1(a)(iv), (v) or (vi), then, to the maximum extent permitted by law,
within 180 days thereafter, the holders of a Majority Interest may elect to
reconstitute the Partnership and continue its business on the same terms and
conditions set forth in this Agreement by forming a new limited partnership
on terms identical to those set forth in this Agreement and having as the
successor general partner a Person approved by the holders of a Majority
Interest. 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 2.7 unless earlier dissolved in
accordance with this Article XII;
(ii) if the successor General Partner is not the former General
Partner, then the interest of the former General Partner shall be
treated in the manner provided in Section 11.3; 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 2.6; provided, that the right of the holders of a
Majority Interest 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, Genesis OLP nor
any Group Member 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.
12.3 Liquidator
Upon dissolution of the Partnership, unless the Partnership is
continued under an election to reconstitute and continue the Partnership
pursuant to Section 12.2, the General Partner shall select one or more
Persons to act as Liquidator. The Liquidator (if other than the General
Partner) shall be entitled to receive such compensation for its services as
may be approved by the holders of a Majority Interest. The Liquidator (if
other than the General Partner) shall agree not to resign at any time
without 15 days' prior notice and may be removed at any time, with or
without cause, by notice of removal approved by the holders of a Majority
Interest. Upon dissolution, removal or resignation of the Liquidator, a
successor and substitute Liquidator (who shall have and succeed to all
rights, powers and duties of the original Liquidator) shall within 30 days
thereafter be approved by the holders of a Majority Interest. 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 XII, 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 7.3(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.
12.4 Liquidation
The Liquidator shall proceed to dispose of the assets of the
Partnership, discharge its liabilities, and otherwise wind up its affairs in
such manner and over such period as the Liquidator determines to be in the
best interest of the Partners, subject to Section 17-804 of the Delaware Act
and the following:
(a) Disposition of Assets. The assets may be disposed of by public or
private sale or by distribution in kind to one or more Partners on such
terms as the Liquidator and such Partner or Partners may agree. If any
property is distributed in kind, the Partner receiving the property shall be
deemed for purposes of Section 12.4(c) to have received cash equal to its
fair market value; and contemporaneously therewith, appropriate cash
distributions must be made to the other Partners. The Liquidator may, in its
absolute discretion, defer liquidation or distribution of the Partnership's
assets for a reasonable time if it determines that an immediate sale of all
or some of the Partnership's assets would be impractical or would cause
undue loss to the partners. The Liquidator may, in its absolute discretion,
distribute the Partnership's assets, in whole or in part, in kind if it
determines that a sale would be impractical or would cause undue loss to the
partners.
(b) Discharge of Liabilities. Liabilities of the Partnership include
amounts owed to Partners otherwise than in respect of their distribution
rights under Article VI. With respect to any liability that is contingent,
conditional or unmatured or is otherwise not yet due and payable, the
Liquidator shall either settle such claim for such amount as it thinks
appropriate or establish a reasonable reserve of cash or other assets to
provide for its payment. When paid, any unused portion of the reserve shall
be distributed as additional liquidation proceeds.
(c) Liquidation Distributions. All property and all cash in excess of
that required to discharge liabilities as provided in Section 12.4(b) shall
be distributed to the Partners in accordance with, and to the extent of, the
positive balances in their respective Capital Accounts, as determined after
taking into account all Capital Account adjustments (other than those made
by reason of distributions pursuant to this Section 12.4(c)) for the taxable
year of the Partnership during which the liquidation of the Partnership
occurs (with such date of 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).
12.5 Cancellation of Certificate of Limited Partnership
Upon the completion of the distribution of Partnership cash and
property as provided in Section 12.4 in connection with the liquidation of
the Partnership, the Partnership shall be terminated and the Certificate of
Limited Partnership and all qualifications of the Partnership as a foreign
limited partnership in jurisdictions other than the State of Delaware shall
be canceled and such other actions as may be necessary to terminate the
Partnership shall be taken.
12.6 Return of Contributions
The General Partner shall not be personally liable for, and shall have
no obligation to contribute or loan any monies or property to the
Partnership to enable it to effectuate, the return of the Capital
Contributions of the Limited Partners, or any portion thereof, it being
expressly understood that any such return shall be made solely from
Partnership assets.
12.7 Waiver of Partition
To the maximum extent permitted by law, each Partner hereby waives any
right to partition of the Partnership property.
12.8 Capital Account Restoration
No Limited Partner shall have any obligation to restore any negative
balance in its Capital Account upon liquidation of the Partnership. The
General Partner shall be obligated to restore any negative balance in its
Capital Account upon liquidation of its interest in the Partnership by the
end of the taxable year of the Partnership during which such liquidation
occurs, or, if later, within 90 days after the date of such liquidation.
ARTICLE XIII
Amendment of Partnership Agreement; Meetings; Record Date
13.1 Amendment to be Adopted Solely by the General Partner
Each Partner agrees that the General Partner, without the approval of
any Partner or Assignee, may amend any provision of this Agreement and
execute, swear to, acknowledge, deliver, file and record whatever documents
may be required in connection therewith, to reflect:
(a) a change in the name of the Partnership, the location of the
principal place of business of the Partnership, the registered agent of the
Partnership or the registered office of the Partnership;
(b) admission, substitution, withdrawal or removal of Partners in
accordance with this Agreement;
(c) a change that, in the sole discretion of the General Partner, is
necessary or advisable 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 to ensure
that no Group Member will be treated as an association taxable as a
corporation or otherwise taxed as an entity for federal income tax purposes;
(d) a change that, in the discretion of the General Partner, (i) does
not adversely affect the Limited Partners in any material respect, (ii) is
necessary or advisable (A) 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 the Delaware Act), (B) to facilitate the
trading of Limited Partner Interests (including the division of any class or
classes of Outstanding Limited Partner Interests into different classes to
facilitate uniformity of tax consequences within such classes of Limited
Partner Interests) or comply with any rule, regulation, guideline or
requirement of any National Securities Exchange on which Limited Partner
Interests are or will be listed for trading, compliance with any of which
the General Partner determines in its discretion to be in the best interests
of the Partnership and the Limited Partners or (C) in connection with action
taken by the General Partner pursuant to Section 5.7, or (iii) is required
to effect the intent expressed in the Registration Statement or the Proxy
Statement or the intent of the provisions of this Agreement or is otherwise
contemplated by this Agreement;
(e) a change in the fiscal year or taxable year of the Partnership and
any changes that, in the discretion of the General Partner, are necessary or
advisable as a result of a change in the fiscal year or taxable year of the
Partnership including, if the General Partner shall so determine, a change
in the definition of "Quarter" and the dates on which distributions are to
be made by the Partnership;
(f) an amendment that is necessary, in the Opinion of Counsel, to
prevent the Partnership or the General Partner or its directors, officers,
trustees or agents 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, regardless of whether
such are substantially similar to plan asset regulations currently applied
or proposed by the United States Department of Labor;
(g) an amendment that, in the discretion of the General Partner, is
necessary or advisable in connection with the authorization of issuance of
any class or series of Partnership Securities pursuant to Section 5.5;
(h) any amendment expressly permitted in this Agreement to be made by
the General Partner acting alone;
(i) an amendment effected, necessitated or contemplated by a Merger
Agreement approved in accordance with Section 14.3;
(j) an amendment that, in the discretion of the General Partner, is
necessary or advisable to reflect, account for and deal with appropriately
the formation by the Partnership of, or investment by the Partnership in,
any corporation, partnership, joint venture, limited liability company or
other entity, in connection with the conduct by the Partnership of
activities permitted by the terms of Section 2.4;
(k) a merger or conveyance pursuant to Section 14.3(d); or
(l) any other amendments substantially similar to the foregoing.
13.2 Amendment Procedures
Except as provided in Sections 13.1 and 13.3, 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, which consent may be given or withheld in its sole
discretion. A proposed amendment shall be effective upon its approval by the
holders of a Majority Interest, unless a greater or different percentage is
required under this Agreement or by Delaware law. Each proposed amendment
that requires the approval of the holders of a specified percentage of
Outstanding Limited Partner Interests shall be set forth in a writing that
contains the text of the proposed amendment. If such an amendment is
proposed, the General Partner shall seek the written approval of the
requisite percentage of Outstanding Limited Partner Interests or call a
meeting of the Limited Partners to consider and vote on such proposed
amendment. The General Partner shall notify all Record Holders upon final
adoption of any such proposed amendments.
13.3 Amendment Requirements
(a) Notwithstanding the provisions of Sections 13.1 and 13.2, no
provision of this Agreement that establishes a percentage of Outstanding
Limited Partner Interests (including Limited Partner Interests deemed owned
by the General Partner) 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 percentage unless such amendment is approved
by the written consent or the affirmative vote of holders of Outstanding
Limited Partner Interests (including Limited Partner Interests deemed owned
by the General Partner) whose aggregate Outstanding Limited Partner
Interests constitute not less than the voting requirement sought to be
reduced.
(b) Notwithstanding the provisions of Sections 13.1 and 13.2, no
amendment to this Agreement may (i) enlarge the obligations of any Limited
Partner without its consent, unless such shall be deemed to have occurred as
a result of an amendment approved pursuant to Section 13.3(c), (ii) enlarge
the obligations of, restrict in any way any action by or rights of, or
reduce in any way the amounts distributable, reimbursable or otherwise
payable to, the General Partner or any of its Affiliates without its
consent, which may be given or withheld in its sole discretion, (iii) change
Section 12.1(a) or 12.1(c), or (iv) change the term of the Partnership or,
except as set forth in Section 12.1(c) or 12.1(e), give any Person the right
to dissolve the Partnership.
(c) Except as provided in Section 14.3, and except as otherwise
provided, and without limitation of the General Partner's authority to adopt
amendments to this Agreement as contemplated in Section 13.1, any amendment
that would have a material adverse effect on the rights or preferences of
any class of Partnership Interests in relation to other classes of
Partnership Interests must be approved by the holders of not less than a
majority of the Outstanding Partnership Interests of the class affected.
(d) Notwithstanding any other provision of this Agreement, except for
amendments pursuant to Section 7.3 or 13.1 and except as otherwise provided
by Section 14.3(b), no amendments shall become effective without the
approval of the holders of a Ninety Percent Interest unless the Partnership
obtains an Opinion of Counsel to the effect that such amendment will not
affect the limited liability of any Limited Partner under applicable law.
(e) Except as provided in Section 13.1, this Section 13.3 shall only
be amended with the approval of the holders of a Ninety Percent Interest.
13.4 Special Meetings
All acts of Limited Partners to be taken pursuant to this Agreement
shall be taken in the manner provided in this Article XIII. Special meetings
of the Limited Partners may be called by the General Partner or by Limited
Partners owning 20% or more of the Outstanding Limited Partner Interests of
the class or classes for which a meeting is proposed and which are entitled
to vote thereat. Limited Partners shall call a special meeting by delivering
to the General Partner one or more requests in writing stating that the
signing Limited Partners wish to call a special meeting and indicating the
general or specific purposes for which the special meeting is to be called.
Within 60 days after receipt of such a call from Limited Partners or within
such greater time as may be reasonably necessary for the Partnership to
comply with any statutes, rules, regulations, listing agreements or similar
requirements governing the holding of a meeting or the solicitation of
proxies for use at such a meeting, the General Partner shall send a notice
of the meeting to the Limited Partners either directly or indirectly through
the Transfer Agent. A meeting shall be held at a time and place determined
by the General Partner on a date not less than 10 days nor 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.
13.5 Notice of a Meeting
Notice of a meeting called pursuant to Section 13.4 shall be given to
the Record Holders of the class or classes of Limited Partner Interests for
which a meeting is proposed in writing by mail or other means of written
communication in accordance with Section 16.1. 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.
13.6 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 13.11, 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 Limited Partner Interests 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.
13.7 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 XIII.
13.8 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 occurred at a meeting
duly held after regular call and notice, if a quorum is present either in
person or by proxy, and if, either before or after the meeting, Limited
Partners representing such quorum who were present in person or by proxy and
entitled to vote, sign a written waiver of notice or an approval of the
holding of the meeting or an approval of the minutes thereof. All waivers
and approvals shall be filed with the Partnership records or made a part of
the minutes of the meeting. Attendance of a Limited Partner at a meeting
shall constitute a waiver of notice of the meeting, except when the Limited
Partner does not approve, at the beginning of the meeting, of the
transaction of any business because the meeting is not lawfully called or
convened; and except that attendance at a meeting is not a waiver of any
right to disapprove the consideration of matters required to be included in
the notice of the meeting, but not so included, if the disapproval is
expressly made at the meeting.
13.9 Quorum
The holders of a majority of the Outstanding Limited Partner Interests
(including Limited Partner Interests deemed owned by the General Partner) of
the class or classes for which a meeting has been called and which are
entitled to vote represented in person or by proxy shall constitute a quorum
at a meeting of Limited Partners of such class or classes unless any such
action by the Limited Partners requires approval by holders of a greater
percentage of such Limited Partner Interests, in which case the quorum shall
be such greater percentage. 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 Limited Partner
Interests (including Limited Partner Interests deemed owned by the General
Partner) that in the aggregate represent a majority of the Outstanding
Limited Partner Interests (including Limited Partner Interests deemed owned
by the General Partner) 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 Limited Partner Interests
(including Limited Partner Interests deemed owned by the General Partner)
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 Limited
Partner Interests (including Limited Partner Interests deemed owned by the
General Partner) 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 holders of at least a majority of the Outstanding
Limited Partner Interests (including Limited Partner Interests deemed owned
by the General Partner) entitled to vote at such meeting represented either
in person or by proxy, but no other business may be transacted, except as
provided in Section 13.7.
13.10 Conduct of a Meeting
The General Partner shall have full power and authority concerning the
manner of conducting any meeting of the Partners or solicitation of
approvals in writing, including the determination of Persons entitled to
vote, the existence of a quorum, the satisfaction of the requirements of
Section 13.4, the conduct of voting, the validity and effect of any proxies
and the determination of any controversies, votes or challenges arising in
connection with or during the meeting or voting. The General Partner shall
designate a Person to serve as chairman of any meeting and shall further
designate a Person to take the minutes of any meeting. All minutes shall be
kept with the records of the Partnership maintained by the General Partner.
The General Partner may make such other regulations consistent with
applicable law and this Agreement as it may deem advisable concerning the
conduct of any meeting of the Partners or solicitation of approvals in
writing, including 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.
13.11 Action Without a Meeting
If authorized by the General Partner, 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
Limited Partner Interests (including Limited Partner Interests deemed owned
by the General Partner) that would be necessary to authorize or take such
action at a meeting at which all the Limited Partners were present and voted
(unless such provision conflicts with any rule, regulation, guideline or
requirement of any National Securities Exchange on which Limited Partner
Interests are listed for trading, in which case the rule, regulation,
guideline or requirement of such exchange shall govern). 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 Limited Partner Interests held by a Limited Partner the
Partnership shall be deemed to have failed to receive a ballot for the
Limited Partner Interests that were not voted. If approval of the taking of
any action by the Limited Partners is solicited by any Person other than by
or on behalf of the General Partner, the written approvals shall have no
force and effect unless and until (a) they are deposited with the
Partnership in care of the General Partner, (b) approvals sufficient to take
the action proposed are dated as of a date not more than 90 days prior to
the date sufficient approvals are deposited with the Partnership and (c) an
Opinion of Counsel is delivered to the General Partner to the effect that
the exercise of such right and the action proposed to be taken with respect
to any particular matter (i) will not cause the Limited Partners to be
deemed to be taking part in the management and control of the business and
affairs of the Partnership so as to jeopardize the Limited Partners' limited
liability, and (ii) is otherwise permissible under the state statutes then
governing the rights, duties and liabilities of the Partnership and the
Partners.
13.12 Voting and Other Rights
(a) Only those Record Holders of the Limited Partner Interests on the
Record Date set pursuant to Section 13.6 (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 Limited
Partner Interests 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
Limited Partner Interests shall be deemed to be references to the votes or
acts of the Record Holders of such Outstanding Limited Partner Interests.
(b) With respect to Limited Partner Interests 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 Limited Partner Interests are registered, such other Person
shall, in exercising the voting rights in respect of such Limited Partner
Interests on any matter, and unless the arrangement between such Persons
provides otherwise, vote such Limited Partner Interests 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 13.12(b) (as well as all other
provisions of this Agreement) are subject to the provisions of Section 4.3.
ARTICLE XIV
Merger
14.1 Authority
The Partnership may merge or consolidate with one or more corporations,
limited liability companies, business trusts or associations, real estate
investment trusts, common law trusts or unincorporated businesses, including
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 XIV.
14.2 Procedure for Merger or Consolidation
Merger or consolidation of the Partnership pursuant to this Article XIV
requires the prior approval of the General Partner. If the General Partner
shall determine, in the exercise of its discretion, to consent to the merger
or consolidation, the General Partner shall approve the Merger Agreement,
which shall set forth:
(a) The names and jurisdictions of formation or organization of each
of the business entities proposing to merge or consolidate;
(b) The name and jurisdiction 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 partner interests, rights, securities or obligations
of the Surviving Business Entity; and (i) if any general or limited partner
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 partner interests, rights, securities or obligations of the
Surviving Business Entity, the cash, property or general or limited partner
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 partner interests,
securities or rights are to receive in exchange for, or upon conversion of
their general or limited partner interests, securities or rights, and (ii)
in the case of securities represented by certificates, upon the surrender of
such certificates, which cash, property or general or limited partner
interests, rights, securities or obligations of the Surviving Business
Entity or any general or limited partnership, corporation, trust or other
entity (other than the Surviving Business Entity), or evidences thereof, are
to be delivered;
(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, certificate of formation or limited
liability company agreement 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 14.4 or a later date
specified in or determinable in accordance with the Merger Agreement
(provided, that if the effective time of the merger is to be later than the
date of the filing of the certificate of merger, the effective time shall be
fixed no later than the time of the filing of the certificate of merger and
stated therein); and
(g) Such other provisions with respect to the proposed merger or
consolidation as are deemed necessary or appropriate by the General Partner.
14.3 Approval by Limited Partners of Merger or Consolidation
(a) Except as provided in Section 14.3(d), the General Partner, upon
its approval of the Merger Agreement, shall direct that the Merger Agreement
be submitted to a vote of the Limited Partners, whether at a special meeting
or by written consent, in either case in accordance with the requirements of
Article XIII. A copy or a summary of the Merger Agreement shall be included
in or enclosed with the notice of a special meeting or the written consent.
(b) Except as provided in Section 14.3(d), the Merger Agreement shall
be approved upon receiving the affirmative vote or consent of the holders of
a Majority Interest unless the Merger Agreement contains any provision that,
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 Limited Partner Interests 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.
(c) Except as provided in Section 14.3(d), 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 14.4, the merger or
consolidation may be abandoned pursuant to provisions therefor, if any, set
forth in the Merger Agreement.
(d) Notwithstanding anything else contained in this Article XIV or in
this Agreement, the General Partner is permitted, in its discretion, without
Limited Partner approval, to merge the Partnership or any Group Member into,
or convey all of the Partnership's assets to, another limited liability
entity which shall be newly formed and shall have no assets, liabilities or
operations at the time of such Merger other than those it receives from the
Partnership or other Group Member if (i) the General Partner has received an
Opinion of Counsel that the merger or conveyance, as the case may be, would
not result in the loss of the limited liability of any Limited Partner or
any limited partner in Genesis OLP or cause the Partnership or Genesis OLP
to be treated as an association taxable as a corporation or otherwise to be
taxed as an entity for federal income tax purposes (to the extent not
previously treated as such), (ii) the sole purpose of such merger or
conveyance is to effect a mere change in the legal form of the Partnership
into another limited liability entity and (iii) the governing instruments of
the new entity provide the Limited Partners and the General Partner with the
same rights and obligations as are herein contained.
14.4 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.
14.5 Effect of Merger
(a) At the effective time of the certificate of merger:
(i) all of the rights, privileges and powers of each of the business
entities that has merged or consolidated, and all property, real,
personal and mixed, and all debts due to any of those business entities
and all other things and causes of action belonging to each of those
business entities shall be vested in the Surviving Business Entity and
after the merger or consolidation shall be the property of the
Surviving Business Entity to the extent they were of each constituent
business entity;
(ii) the title to any real property vested by deed or otherwise in
any of those constituent business entities shall not revert and is not
in any way impaired because of the merger or consolidation;
(iii) all rights of creditors and all liens on or security interests
in property of any of those constituent business entities shall be
preserved unimpaired; and
(iv) all debts, liabilities and duties of those constituent business
entities shall attach to the Surviving Business Entity, and may be
enforced against it to the same extent as if the debts, liabilities and
duties had been incurred or contracted by it.
(b) A merger or consolidation effected pursuant to this Article XIV
shall not be deemed to result in a transfer or assignment of assets or
liabilities from one entity to another.
ARTICLE XV
Right to Acquire Limited Partner Interests
15.1 Right to Acquire Limited Partner Interests
(a) Notwithstanding any other provision of this Agreement, if at any
time not more than 20% of the total Limited Partner Interests of any class
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 in whole or in part to the Partnership or any
Affiliate of the General Partner, exercisable in its sole discretion, to
purchase all, but not less than all, of such Limited Partner Interests of
such class then Outstanding held by Persons other than the General Partner
and its Affiliates, at the greater of (x) the Current Market Price as of the
date three days prior to the date that the notice described in Section
15.1(b) is mailed and (y) the highest price paid by the General Partner or
any of its Affiliates for any such Limited Partner Interest of such class
purchased during the 90-day period preceding the date that the notice
described in Section 15.1(b) is mailed. As used in this Agreement, (i)
"Current Market Price" as of any date of any class of Limited Partner
Interests listed or admitted to trading on any National Securities Exchange
means the average of the daily Closing Prices (as hereinafter defined) per
Limited Partner Interest of such class for the 20 consecutive Trading Days
(as hereinafter defined) immediately prior to such date; (ii) "Closing
Price" for any day means the last sale price on such day, regular way, or in
case no such sale takes place on such day, the average of the closing bid
and asked prices on such day, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to
securities listed or admitted for trading on the principal National
Securities Exchange (other than the Nasdaq Stock Market) on which such
Limited Partner Interests of such class are listed or admitted to trading
or, if such Limited Partner Interests of such class are not listed or
admitted to trading on any National Securities Exchange (other than the
Nasdaq Stock Market), the last quoted price on such day or, if not so
quoted, the average of the high bid and low asked prices on such day in the
over-the-counter market, as reported by the Nasdaq Stock Market or such
other system then in use, or, if on any such day such Limited Partner
Interests of such class are not quoted by any such organization, the average
of the closing bid and asked prices on such day as furnished by a
professional market maker making a market in such Limited Partner Interests
of such class selected by the General Partner, or if on any such day no
market maker is making a market in such Limited Partner Interests of such
class, the fair value of such Limited Partner Interests on such day as
determined reasonably and in good faith by the General Partner; and (iii)
"Trading Day" means a day on which the principal National Securities
Exchange on which such Limited Partner Interests of any class are listed or
admitted to trading is open for the transaction of business or, if Limited
Partner Interests of a class are not listed or admitted to trading on any
National Securities Exchange, a day on which banking institutions in New
York City generally are open.
(b) If the General Partner, any Affiliate of the General Partner or
the Partnership elects to exercise the right to purchase Limited Partner
Interests granted pursuant to Section 15.1(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
Limited Partner Interests of such class (as of a Record Date selected by the
General Partner) at least 10, but not more than 60, days prior to the
Purchase Date. Such Notice of Election to Purchase shall also be published
for a period of at least three consecutive days in at least two daily
newspapers of general circulation printed in the English language and
published in the Borough of Manhattan, New York. The Notice of Election to
Purchase shall specify the Purchase Date and the price (determined in
accordance with Section 15.1(a)) at which Limited Partner Interests will be
purchased and state that the General Partner, its Affiliate or the
Partnership, as the case may be, elects to purchase such Limited Partner
Interests, upon surrender of Certificates representing such Limited Partner
Interests 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 such Limited Partner Interests are
listed or admitted to trading. Any such Notice of Election to Purchase
mailed to a Record Holder of Limited Partner Interests at his address as
reflected in the records of the Transfer Agent shall be conclusively
presumed to have been given regardless of whether the owner receives such
notice. On or prior to the Purchase Date, the General Partner, its Affiliate
or the Partnership, as the case may be, shall deposit with the Transfer
Agent cash in an amount sufficient to pay the aggregate purchase price of
all of such Limited Partner Interests to be purchased in accordance with
this Section 15.1. If the Notice of Election to Purchase shall have been
duly given as aforesaid at least 10 days prior to the Purchase Date, and if
on or prior to the Purchase Date the deposit described in the preceding
sentence has been made for the benefit of the holders of Limited Partner
Interests 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 Limited Partner
Interests (including any rights pursuant to Articles IV, V, VI, and XII)
shall thereupon cease, except the right to receive the purchase price
(determined in accordance with Section 15.1(a)) for Limited Partner
Interests therefor, without interest, upon surrender to the Transfer Agent
of the Certificates representing such Limited Partner Interests, and such
Limited Partner Interests 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 Limited Partner
Interests from and after the Purchase Date and shall have all rights as the
owner of such Limited Partner Interests (including all rights as owner of
such Limited Partner Interests pursuant to Articles IV, V, VI and XII).
(c) At any time from and after the Purchase Date, a holder of an
Outstanding Limited Partner Interest subject to purchase as provided in this
Section 15.1 may surrender his Certificate evidencing such Limited Partner
Interest to the Transfer Agent in exchange for payment of the amount
described in Section 15.1(a), therefor, without interest thereon.
ARTICLE XVI
General Provisions
16.1 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 Partnership
Security 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 Partnership Security 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 16.1 executed by the General Partner, the Transfer Agent or the
mailing organization shall be prima facie evidence of the giving or making
of such notice, payment or report. If any notice, payment or report
addressed to a Record Holder at the address of such Record Holder appearing
on the books and records of the Transfer Agent or the Partnership is
returned by the United States Post Office marked to indicate that the United
States Postal Service is unable to deliver it, such notice, payment or
report and any subsequent notices, payments and reports shall be deemed to
have been duly given or made without further mailing (until such time as
such Record Holder or another Person notifies the Transfer Agent or the
Partnership of a change in his address) if they are available for the
Partner or Assignee at the principal office of the Partnership for a period
of one year from the date of the giving or making of such notice, payment or
report to the other Partners and Assignees. Any notice to the Partnership
shall be deemed given if received by the General Partner at the principal
office of the Partnership designated pursuant to Section 2.3. 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.
16.2 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.
16.3 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.
16.4 Integration
This Agreement constitutes the entire agreement among the parties
hereto pertaining to the subject matter hereof and supersedes all prior
agreements and understandings pertaining thereto.
16.5 Creditors
None of the provisions of this Agreement shall be for the benefit of,
or shall be enforceable by, any creditor of the Partnership.
16.6 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 of any other covenant, duty, agreement or condition.
16.7 Counterparts
This Agreement may be executed in counterparts, all of which together
shall constitute an agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or
the same counterpart. Each party shall become bound by this Agreement
immediately upon affixing its signature hereto or, in the case of a Person
acquiring a Limited Partner Interest, upon accepting the certificate
evidencing such Limited Partner Interest or executing and delivering a
Transfer Application as herein described, independently of the signature of
any other party.
16.8 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.
16.9 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.
16.10 Consent of Partners
Each Partner hereby expressly consents and agrees that, whenever in
this Agreement it is specified that an action may be taken upon the
affirmative vote or consent of less than all of the Partners, such action
may be so taken upon the concurrence of less than all of the Partners and
each Partner shall be bound by the results of such action.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
GENERAL PARTNER
GENESIS ENERGY, INC.,
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive Officer
LIMITED PARTNERS
All Limited Partners previously and hereafter
admitted as Limited Partners of the Partnership,
pursuant to powers of attorney previously and
hereafter executed in favor of, and granted and
delivered to the General Partner.
By: Genesis Energy, Inc.
General Partner, as attorney-in-fact for all
Limited Partners pursuant to the Powers of
Attorney granted pursuant to Section 2.6.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive Officer
HOU:528722.5