EXHIBIT 3.B.3
THIRD AMENDMENT
TO THE
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
GULFTERRA ENERGY PARTNERS, L.P.
This Third Amendment (this "AMENDMENT") dated May 16, 2003 (the
"AMENDMENT DATE"), to the Second Amended and Restated Agreement of Limited
Partnership of GulfTerra Energy Partners, L.P. (the "PARTNERSHIP"), amended and
restated effective as of May 5, 2003, is entered into by and among GulfTerra
Energy Company, L.L.C., a Delaware limited liability company, as the General
Partner (the "GENERAL PARTNER"), and the Limited Partners.
INTRODUCTION
A. The Partnership desires to issue the Series F Convertible Units (as
defined in this Amendment) with the rights, preferences, obligations and
attributes set forth herein; and
B. In connection with such issuance, it is necessary and appropriate to
amend the Partnership Agreement.
AGREEMENT
In consideration of the covenants, conditions and agreements contained
herein, pursuant to Section 15.1 of the Partnership Agreement, the Partnership
Agreement is hereby amended as set forth herein.
1. UNDEFINED TERMS. Undefined terms used herein are defined in the
Partnership Agreement.
2. AMENDMENTS.
A. The Partnership Agreement is hereby amended by the inclusion in
its entirety of the Statement of Rights, Privileges and Limitations of
Series F Convertible Units of GulfTerra Energy Partners, L.P. (the
"STATEMENT"), which is attached to this Amendment as Annex A. The
Statement provides for the creation of a new series of units, the
Series F Convertible Units (the "SERIES F CONVERTIBLE UNITS") which
shall be convertible into Series A Common Units from time to time in
accordance with, and upon payment of the consideration specified in,
the Statement.
B. To the extent the Statement and the Partnership Agreement, as
amended, are inconsistent or conflict with respect to any provision,
the Statement shall control as it relates to the rights, preferences,
obligations and attributes of the Series F Convertible Units.
3. MISCELLANEOUS.
A. PRONOUNS AND PLURALS. Whenever the context may require, any
pronoun used in this Amendment 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. FURTHER ACTION. The parties hereto 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 Amendment.
C. BINDING EFFECT. This Amendment shall be binding upon and inure to
the benefit of the parties hereto and their heirs, executors,
administrators, successors, legal representatives and permitted
assigns.
D. INTEGRATION. This Amendment constitutes the entire agreement
among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understandings pertaining thereto.
E. CREDITORS. None of the provisions of this Amendment shall be for
the benefit of, or shall be enforceable by, any creditor of the
Partnership.
F. WAIVER. No failure by any party to insist upon the strict
performance of any covenant duty, agreement or condition of this
Amendment or to exercise any right or remedy consequent upon a breach
thereof shall constitute a waiver of any such breach or any other
covenant duty, agreement or condition.
G. COUNTERPARTS. This Amendment may be executed in counterparts, all
of which together shall constitute an agreement binding on all of 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 Amendment immediately upon affixing its signature
hereto, or, in the case of a Person acquiring a Unit, upon executing
and delivering a Transfer Application as described in the Partnership
Agreement, independently of the signature of any other party.
H. APPLICABLE LAW. This Amendment 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.
I. INVALIDITY OF PROVISIONS. If any provision of this Amendment 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.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the Amendment Date.
GENERAL PARTNER
GulfTerra Energy Company, L.L.C.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President and Chief Financial Officer
LIMITED PARTNERS
All Limited Partners now and hereafter
admitted as limited partners of the
Partnership, pursuant to Powers of
Attorney now and hereafter executed in
favor of, and granted and delivered to,
the General Partner.
By: GulfTerra Energy Company, L.L.C.,
General Partner, as attorney-in-fact for
all Limited Partners pursuant to Powers of
Attorney granted pursuant to Section 1.4.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President and Chief Financial Officer
[Third Amendment to Second Amended and Restated
Partnership Agreement Signature Page]
ANNEX A
STATEMENT OF RIGHTS, PRIVILEGES AND LIMITATIONS OF SERIES F CONVERTIBLE UNITS
[SEE ATTACHED]
ANNEX A TO THE THIRD AMENDMENT
TO THE SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF GULFTERRA ENERGY PARTNERS, L.P.
STATEMENT OF RIGHTS, PRIVILEGES AND LIMITATIONS
OF SERIES F CONVERTIBLE UNITS
OF
GULFTERRA ENERGY PARTNERS, L.P.
DATED MAY 16, 2003
TABLE OF CONTENTS
PAGE
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Definitions......................................................................1
Conversion of Series F Convertible Unit..........................................7
Number of Series A Common Units; Term.........................................7
Minimum Conversion Unit Price.................................................8
Extension of Term.............................................................8
Manner of Conversion..........................................................9
Conditions to Closing.........................................................9
When Conversion Effective....................................................11
Delivery of Series F Convertible Unit and Payment............................11
Delivery of Unit Certificates, etc...........................................12
Adjustment of Unit Prices and Series A Common Units Issuable Upon Conversion....12
General; Conversion Unit Price...............................................12
Treatment of Partnership Interest Adjusting Events...........................13
Adjustments for Merger, Consolidation, Sale of Assets........................13
No Prohibition from Issuing Series A Common Units............................17
Nature and Rights of Series F Convertible Unit..................................17
Non-Voting ..................................................................17
No Allocations...............................................................18
No Distributions.............................................................18
Registration Statement and Blackout Periods.....................................18
Transferability.................................................................22
Transfer of Series F Convertible Units.......................................22
Payment of Tax Upon Issue of Transfer........................................22
Denial of Preemptive Rights and Dissenters' Rights..............................22
Transfer Agent..................................................................22
Notices ........................................................................23
Construction....................................................................24
Severability of Provisions......................................................24
Exhibits
Exhibit A - Certificate Representing Series F Convertible Unit
Exhibit B - Form of Conversion Notice
Schedules
Schedule A - Accounts
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STATEMENT OF RIGHTS, PRIVILEGES AND LIMITATIONS
OF SERIES F CONVERTIBLE UNITS
OF
GULFTERRA ENERGY PARTNERS, L.P.
The following is a Statement of Rights, Privileges and Limitations of
Series F Convertible Units (this "STATEMENT") of GulfTerra Energy Partners,
L.P., a
Delaware limited partnership (the "PARTNERSHIP"). The Partnership has
authorized and established a new series of unit that shall be designated as the
"Series F Convertible Units" (the "SERIES F CONVERTIBLE UNITS"), which series
shall consist of two classes, the Series F1 Convertible Units (the "SERIES F1
CONVERTIBLE UNITS") and the Series F2 Convertible Units (the "SERIES F2
CONVERTIBLE UNITS"), which will each be comprised of eighty (80) units. Each
Series F Convertible Unit shall be represented by a certificate in the form of
Exhibit A to this Statement. The rights, privileges and limitations of the
Series F Convertible Units, including the convertibility into Series A Common
Units, are set forth in this Statement. References throughout this Statement to
the Series F Convertible Units mean the Series F1 Convertible Units and the
Series F2 Convertible Units.
1. DEFINITIONS. As used in this Statement, unless the context otherwise
requires, the following terms have the following respective meanings:
1.1 13D GROUP means the syndicate or group contemplated in
Section 13(d)(3) of the Exchange Act.
1.2 ACQUIRING PERSON means (i) in connection with any Business
Combination in which the Acquisition Consideration is payable in stock
or other equity securities, the Person issuing the Acquisition
Consideration, and (ii) in connection with any Business Combination in
which the Acquisition Consideration is payable in cash, (a) the Person
acquiring the Partnership by means of merger, consolidation, share
exchange, or other statutory acquisition in which ninety percent (90%)
or more of the outstanding Series A Common Units are exchanged for
cash, securities or other assets, (b) the Person or 13D Group becoming
the beneficial owner of over fifty percent (50%) of the outstanding
Series A Common Units, (c) the transferee of all or substantially all
of the assets of the Partnership (on a consolidated basis), or (d) at
Holder's election, any Person that (i) controls the Acquiring Person
directly or indirectly through one or more intermediaries, (ii) is
required to include the Acquiring Person in the consolidated financial
statements contained in such Parent's Annual Report on Form 10-K (if
such Person is required to file such a report) or would be required to
so include the Acquiring Person in such Person's consolidated financial
statements if they were prepared in accordance with U.S. GAAP and (iii)
is not itself included in the consolidated financial statements of any
other Person (other than its consolidated subsidiaries).
1.3 ACQUISITION CONSIDERATION is defined in Section 3.3.
1.4 BLACKOUT PERIOD is defined in Section 5.2.
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1.5 BLACKOUT VIOLATION is defined in Section 5.5.
1.6 BUSINESS COMBINATION is defined in Section 3.3.
1.7 BUSINESS COMBINATION CASH CONSIDERATION means the value of
the cash consideration that a holder of a Series A Common Unit is
entitled to receive pursuant to a Business Combination.
1.8 BUSINESS COMBINATION CASH PAYMENT is defined in Section
3.3(c).
1.9 BUSINESS COMBINATION STOCK CONSIDERATION means the value
of the Acquiring Person's stock or other non-cash assets that a holder
of a Series A Common Units is entitled to receive pursuant to a
Business Combination as measured, with respect to the Acquiring
Person's stock, using the Daily Market Unit Price of the Acquiring
Person's stock on the Business Day immediately preceding the
consummation of the Business Combination and, with respect to other
non-cash assets, by an independent appraisal firm of established
national reputation selected by the Board of Directors of the General
Partner (the expenses of which firm shall be paid by the Partnership).
1.10 BUSINESS DAY means any day on which the Series A Common
Units may be traded on the Principal Securities Exchange, or if not
admitted for trading on any Principal Securities Exchange, on any day
other than a Saturday, Sunday or holiday on which banks in New York
City are required or permitted to be closed.
1.11 CASH PORTION means the value of (x) the Business
Combination Cash Consideration divided by the value of (y) the sum of
(A) the Business Combination Cash Consideration and (B) the Business
Combination Stock Consideration.
1.12 CASH SETTLEMENT AMOUNT is defined in Section 2.2.
1.13 CHARTER DOCUMENTS mean the Certificate of Limited
Partnership and the Partnership Agreement of the Partnership, as each
may be amended from time to time.
1.13 CONTINGENT CONVERSION NOTICE is defined in Section
3.3(b).
1.14 CONVERSION CLOSING DATE is defined in Section 2.4.
1.15 CONVERSION CONSIDERATION means, with respect to each
Conversion Notice, the dollar amount that a Holder has a right to
designate and has so designated in such Conversion Notice.
1.16 CONVERSION NOTICE is defined in Section 2.4.
1.17 CONVERSION NOTICE DATE means the Business Day on which
the Partnership receives a Conversion Notice from a Holder.
1.18 CONVERSION UNIT PRICE means, with respect to each
Conversion Notice, either (i) if the Prevailing Unit Price is equal to
or greater than the Measuring Date Unit Price, then
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the Conversion Unit Price shall be equal to the Prevailing Unit Price;
or (ii) if the Prevailing Unit Price is less than the Measuring Date
Unit Price, then the Conversion Unit Price shall be equal to the
Prevailing Unit Price minus the product of fifty percent (50%) of the
positive difference, if any, of the Measuring Date Unit Price less the
Prevailing Price; provided that the Conversion Unit Price shall be
subject to adjustment or reduction as set forth in Sections 3 and 5.
1.20 DAILY MARKET UNIT PRICE means for any Business Day, 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 Business Day, regular way, in each case as reported by Bloomberg,
L.P., if the Series A Common Units are not listed or admitted to
trading on the Principal Securities Exchange as reported by Bloomberg,
L.P. on the principal National Securities Exchange on which the Series
A Common Units are listed or admitted to trading or, if the Series A
Common Units are not listed or admitted to trading on any National
Securities Exchange, the last quoted price on such Business Day or, if
not so quoted the average of the high bid and low asked prices on such
Business Day in the over-the-counter market, as reported by the Nasdaq
National Market or such other system then in use, or if on any such day
the Series A Common Units are not quoted by any such organization, the
average of the closing bid and asked price on such Business Day as
furnished by a professional market maker making a market in the Series
A Common Units selected by the Board of Directors of the General
Partner, or if on any such day no market maker is making a market in
the Series A Common Units, the fair value of a Series A Common Unit on
such Business Day as determined reasonably and in good faith by the
Board of Directors of the General Partner.
1.21
DELAWARE ACT means the
Delaware Revised Uniform Limited
Partnership Act, as amended or replaced.
1.22 DELAYED CLOSING CONVERSION NOTICE is defined in Section
5.4(a).
1.23 EXCHANGE ACT means the Securities Exchange Act of 1934,
as amended or replaced.
1.24 GENERAL PARTNER means the General Partner of the
Partnership, as such term is defined in the Charter Documents.
1.25 HOLDER means any Person who is listed as a Holder of the
Series F Convertible Units in the Unit Register as of any relevant date
of determination.
1.26 MAXIMUM NUMBER means 8,329,679, subject to adjustment
pursuant to Section 3.
1.27 MEASURING DATE UNIT PRICE means $35.75, subject to
adjustment pursuant to Section 3.
1.28 MINIMUM CONVERSION PRICE means the Conversion Unit Price
below which the Partnership shall settle a Conversion Notice with the
Cash Settlement Amount in lieu of Series A Common Units on the relevant
Conversion Closing Date, such amount as
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specified by the Partnership with twenty (20) Business Days prior
written notice to the Holder and as amended by the Partnership at any
time and from time to time with twenty (20) Business Days prior written
notice to the Holder pursuant to Section 2.2.
1.29 NATIONAL SECURITIES EXCHANGE shall have the meaning set
forth in the Exchange Act.
1.30 PARTIAL STOCK ADJUSTMENT MEASURING PRICE means the
Measuring Date Unit Price multiplied by the ratio of the Daily Market
Unit Price of the Acquiring Person on the Business Day immediately
preceding the consummation of the Business Combination to the Daily
Market Unit Price of the Partnership on the Business Day immediately
preceding the consummation of the Business Combination.
1.31 PARTIAL STOCK ASSUMPTION AGREEMENT is defined in Section
3.3(d).
1.32 PARTNERSHIP is defined in the introduction.
1.33 PARTNERSHIP AGREEMENT means the
Second Amended and
Restated Agreement of Limited Partnership effective as of the date
hereof of the Partnership, including all exhibits, schedules, annexes
and attachments thereto, as amended, supplemented or otherwise modified
from time to time, including the amendment creating the Series F
Convertible Unit.
1.34 PARTNERSHIP BOND means any of (a) the Partnership's
10 3/8% Senior Subordinated Notes due 2009, 8 1/2% Senior Subordinated
Notes due 2010, 8 1/2% Senior Subordinated Notes due 2011, 8 1/2%
Senior Subordinated Notes due 2011 and 10 5/8% Senior Subordinated
Notes due 2012 and (b) any other note, bond, debenture or similar
instrument issued by the Partnership pursuant to an indenture, so long
as the exchange of such securities as contemplated by this Statement
would be permitted under such indentures, notes and related documents
and the Partnership's other credit arrangements (whether existing or
modified or entered into in the future), including the Partnership's
Sixth Amended and Restated Credit Agreement, as each may be amended
from time to time.
1.35 PARTNERSHIP INTEREST ADJUSTMENT EVENT means any
subdivision or combination of the issued Series A Common Units, whether
by reason of any dividend or distribution of units, split,
recapitalization, reorganization, spinoff, combination or other similar
change.
1.36 PERSON means a corporation, an association, a
partnership, an organization, a business, an individual, a government
or political subdivision thereof or a governmental agency.
1.37 PREVAILING UNIT PRICE means, with respect to any
Conversion Notice Date, the lesser of the average Daily Market Unit
Price during (a) the sixty (60) consecutive Business Day period ending
on and including the fourth Business Day immediately preceding the
Conversion Notice Date, (b) the first seven (7) consecutive Business
Days
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of such sixty (60)-Business Day period or (c) the last seven (7)
consecutive Business Days of such sixty (60)-Business Day period.
1.38 PRINCIPAL SECURITIES EXCHANGE means the New York Stock
Exchange, but if the New York Stock Exchange is not the principal U.S.
trading market for the Series A Common Units, the "Principal Securities
Exchange" shall be deemed to mean the principal U.S. National
Securities Exchange on which the Series A Common Units are traded, or
if the Series A Common Units are not then listed or admitted to trading
on any National Securities Exchange but are designated as a national
market system security or a Nasdaq SmallCap Market Security by the
NASD, or any successor thereto, then such market system, or if the
Series A Common Units are not listed or quoted on any of the foregoing,
then the OTC Bulletin Board.
1.39 PROSPECTUS means the prospectus supplement dated the date
hereof, as such may be amended and supplemented from time to time, to
the Registration Statement, or any successor or replacement prospectus,
or as the Partnership may tender to a Holder in connection with any
Conversion Closing Date.
1.40 QIB means qualified institutional buyer as such term is
defined in Rule 144A of the Securities Act.
1.41 REGISTRATION STATEMENT means the Partnership's
Registration Statement on Form S-3 (Registration No. 333-81772) or any
successor or replacement registration statement.
1.42 RESTATEMENT means, with respect to the Partnership's
quarterly or annual actual (not pro forma) historical financial
statements that have been (i) filed with the SEC, (ii) included in a
press release or (iii) made public by any other method, any restatement
that materially affects the Partnership's consolidated statement of
income or consolidated statement of cash flows; provided, however, that
the term Restatement shall not include any restatement (i) required as
a result of a change occurring after the closing date in (x) applicable
law or (y) generally accepted accounting principles promulgated by the
Financial Accounting Standards Board or the SEC, which change is
implemented by the Partnership in the manner and at the time prescribed
by such law or promulgation, or (ii) resulting in a change from one
generally accepted accounting principle to another; provided, that the
Audit Committee of the Board of Directors of the General Partner has
made the determination to change to another principle after discussions
with the Partnership's external auditors.
1.43 RESTATEMENT FILING DATE means the date on which the
Partnership files quarterly or annual actual (not pro forma) historical
financial statements that constitute a Restatement on a Form 10-K, Form
10-Q, Form 8-K or any other filing with the SEC (and if the Partnership
makes multiple filings of a Restatement with the SEC, the last of such
dates).
1.44 SEC means the United States Securities and Exchange
Commission.
1.45 SECURITIES ACT means the Securities Act of 1933, as
amended.
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1.46 SERIES A COMMON UNITS mean the partnership interests of a
limited partner in the Partnership representing a fractional part of
the partnership interests of all limited partners having the rights and
obligations specified with respect to a Series A Common Unit, such term
to include any units into which all outstanding Series A Common Units
shall have been changed or any units resulting from any Partnership
Interest Adjustment Event.
1.47 SERIES F CONVERTIBLE UNITS mean the partnership interests
of a limited partner in the Partnership representing a fractional part
of the partnership interests of all limited partners having the rights
and obligations specified with respect to a Series F Convertible Unit,
such term to include any units into which all outstanding Series F
Convertible Units shall have been changed (excluding Series A Common
Units issued upon conversion of the Series F Convertible Units) or any
units resulting from any Partnership Interest Adjustment Event, which
term shall refer to the Series F1 Convertible Units and the Series F2
Convertible Units.
1.48 SERIES F1 CONVERSION CONSIDERATION is defined in Section
2.1(a).
1.49 SERIES F1 CONVERTIBLE UNITS mean the partnership
interests of a limited partner in the Partnership representing a
fractional part of the partnership interests of all limited partners
having the rights and obligations specified with respect to a Series F1
Convertible Unit, such term to include any units into which all
outstanding Series F1 Convertible Units shall have been changed
(excluding Series A Common Units issued upon conversion of the Series
F1 Convertible Units) or any units resulting from any Partnership
Interest Adjustment Event.
1.50 SERIES F1 EXPIRATION TIME means 4:00 p.m., New York City
time, on March 29, 2004, subject to adjustment pursuant to Section 2.3.
1.51 SERIES F2 CONVERSION CONSIDERATION is defined in Section
2.1(b).
1.52 SERIES F2 CONVERTIBLE UNITS mean the partnership
interests of a limited partner in the Partnership representing a
fractional part of the partnership interests of all limited partners
having the rights and obligations specified with respect to a Series F2
Convertible Unit, such term to include any units into which all
outstanding Series F2 Convertible Units shall have been changed
(excluding Series A Common Units issued upon conversion of the Series
F2 Convertible Units) or any units resulting from any Partnership
Interest Adjustment Event.
1.53 SERIES F2 EXPIRATION TIME means 4:00 p.m., New York City
time, on March 30, 2005, subject to adjustment pursuant to Section 2.3.
1.54 SERIES F2 VESTING AMOUNT means $40,000,000 or more of
aggregate Series F1 Conversion Consideration (i) received by the
Partnership upon conversion of Series F1 Convertible Units, (ii)
designated in any Conversion Notice for which the Holder receives a
Cash Settlement Amount, (iii) designated in any Conversion Notice for
which the Holder receives an amount of cash pursuant to Section
2.5(d)(ii), and (iv) designated in any Conversion Notice or Contingent
Conversion Notice pursuant to which the Holder
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receives Acquisition Consideration in the form of cash net of the
relevant Conversion Consideration so long as the conversion
contemplated by such Conversion Notice or Contingent Conversion Notice
is consummated, but specifically excluding any amounts deemed converted
pursuant to Sections 3.3(d) and 3.3(f).
1.55 STATEMENT is defined in the introduction, and includes
all exhibits, schedules, annexes, or other attachments, as amended,
supplemented or otherwise modified from time to time.
1.56 STOCK ADJUSTMENT MEASURING PRICE means the Measuring Date
Unit Price divided by the conversion ratio for each Series A Common
Unit as provided by the terms of the Business Combination, where
conversion ratio means the number of shares or units of securities of
the Acquiring Person issued for each Series A Common Unit pursuant to
the Business Combination.
1.57 STOCK ASSUMPTION AGREEMENT is defined in Section 3.3(e).
1.58 STOCK PORTION means the value of (x) the Business
Combination Stock Consideration divided by (y) the sum of (A) the
Business Combination Cash Consideration and (B) the Business
Combination Stock Consideration.
1.59 TERMINATION TIME means the time at which the right of a
Holder to convert the Series F Convertible Units terminates being
either (i) if the Series F2 Convertible Units do not vest as provided
in Section 2.1(b), the Series F1 Expiration Time, or (ii) if the Series
F2 Convertible Units do vest as provided in Section 2.1(b), the Series
F2 Expiration Time with respect to the Series F2 Convertible Units and
the Series F1 Expiration Time with respect to the Series F1 Convertible
Units; in each case, subject to extension as set forth in Section 2.2.
1.60 TRANSFER AGENT is defined in Section 8.
1.61 UNIT REGISTER is defined in Section 8.
2. CONVERSION OF SERIES F CONVERTIBLE UNITS. The convertibility of the
Series F Convertible Units, in whole or in part, is subject to the terms and
conditions contained in this Statement. The Series F Convertible Units shall
expire worthless, and a Holder of such Series F Convertible Units shall have no
rights to convert the Series F Convertible Units, and the Partnership shall have
no obligations with respect to such rights, on the Termination Time.
2.1 NUMBER OF SERIES A COMMON UNITS; TERM. Subject to the
terms, conditions and adjustments set forth in this Statement, each
Series F1 Convertible Unit and Series F2 Convertible Unit shall be
convertible as provided in this Section 2.1.
(a) SERIES F1 CONVERTIBLE UNITS. On any Business Day
after August 12, 2003 (subject to Section 3.3(a)) and from
time to time thereafter on or prior to the Series F1
Expiration Time, each Series F1 Convertible Unit shall be
convertible into the number of Series A Common Units
determined pursuant to Section 3.1; provided that the
aggregate Conversion Consideration that the Partnership
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receives pursuant to conversions of any Series F1 Convertible
Unit (the "SERIES F1 CONVERSION CONSIDERATION") shall not
exceed $1,000,000.
(b) SERIES F2 CONVERTIBLE UNITS. If the Partnership
receives Conversion Notices with respect to the Series F1
Convertible Units in the aggregate equal to or greater than
the Series F2 Vesting Amount on or prior to the Series F1
Expiration Time, then upon the Partnership's receipt of the
Series F2 Vesting Amount (subject to Section 3.3(a)) on any
Business Day and at any time and from time to time on or prior
to the Series F2 Expiration Time, each Series F2 Convertible
Unit shall be convertible into the number of Series A Common
Units determined pursuant to Section 3.1; provided that the
Conversion Consideration that the Partnership receives
pursuant to conversions of any Series F2 Convertible Unit (the
"SERIES F2 CONVERSION CONSIDERATION") shall not exceed
$500,000.
Notwithstanding anything to the contrary in this Statement, the
Partnership shall not be obligated to issue, and the Holder(s) shall
not have a right to acquire upon conversion of the Series F Convertible
Units, more than the Maximum Number of Series A Common Units.
2.2 MINIMUM CONVERSION UNIT PRICE.
(a) If the Conversion Unit Price with respect to any
Conversion Notice is below the Minimum Conversion Price, then
the Partnership shall, in lieu of issuing Series A Common
Units upon conversion of Series F Convertible Units covered by
such Conversion Notice, pay an amount in cash to such Holder
equal to the difference of (x) the product of (A) the number
of Series A Common Units issuable on the relevant Conversion
Closing Date and (B) the Daily Market Unit Price as of the
Business Day immediately preceding the Conversion Notice Date
and (y) the Conversion Consideration designated in the
relevant Conversion Notice (the "CASH SETTLEMENT AMOUNT"). The
Partnership shall tender the Cash Settlement Amount in
immediately available funds by 5:00 p.m., New York City time,
on the relevant Conversion Closing Date, to the account
specified in the Holder's Conversion Notice. Upon receipt of
the Cash Settlement Amount, that number of Series F
Convertible Units with aggregate Series F1 Conversion
Consideration and Series F2 Conversion Consideration equal to
the Conversion Consideration designated in the Conversion
Notice shall be deemed converted, but the Holder shall not be
required to tender the Conversion Consideration designated in
the relevant Conversion Notice. If the Conversion
Consideration deemed to have been tendered pursuant to this
Section 2.2 is less than the remaining, unconverted portion of
Series F Convertible Units represented by the certificate(s)
tendered to the Partnership on the Conversion Closing Date,
the Partnership shall issue a replacement certificate(s) as
provided in Section 2.8(b). At any time and from time to time
with twenty (20) Business Days notice to the Holder, the
Partnership shall be entitled to establish a new Minimum
Conversion Price.
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(b) The Partnership shall, within two (2) Business Days of a
Conversion Closing Date pursuant to this Section 2.2, give the Holder
written notice if the Partnership is unable to tender the Cash
Settlement Amount on such Conversion Closing Date. Within one (1)
Business Day after receipt of such notice, Holder shall give the
Partnership written notice, at its sole election, of it's election to
(x) withdraw the Conversion Notice or (y) receive Series A Common Units
as determined pursuant to Section 3.1 in lieu of the Cash Settlement
Amount, which Conversion Closing Date shall occur within three (3)
Business Days of the Partnership's receipt of such Holder's election
pursuant to this Section 2.2(b).
2.3 EXTENSION OF TERM. The Series F1 Expiration Time and the Series F2
Expiration Time, as applicable, shall be extended:
(a) by one Business Day for each Business Day:
(i) that a Blackout Period or a Blackout Violation
exists; and
(ii) during the period commencing on the earlier of the
day on which the Partnership (x) announces a Restatement and
(y) announces its intention to make a Restatement and ending
on the Restatement Filing Date; and
(b) to the extent that the Partnership (x) announces a Restatement
or (y) announces its intention to make a Restatement, in either case,
within 65 Business Days of the Series F1 Expiration Time or Series F2
Expiration Time, as applicable, to a date that is 65 Business Days
after the Restatement Filing Date.
Provided, that, if the conditions described in clauses (i) and (ii) of paragraph
(a) above both exist on the same Business Day, then the Series F1 Expiration
Time or the Series F2 Expiration Time, as applicable, shall be extended by only
one Business Day for each Business Day on which these conditions both exist.
2.4 MANNER OF CONVERSION. Subject to and upon compliance with the terms
and conditions set forth in this Statement, each Holder shall be entitled to
convert each Series F Convertible Unit that such Holder holds, in whole or in
part, from time to time, on any Business Day, by receipt by the Partnership of a
notice made pursuant to Section 9 in substantially the form of Exhibit B
attached to this Statement (or a reasonable facsimile thereof) duly executed by
such Holder (a "CONVERSION NOTICE"). The closing of each conversion shall take
place at or before 2:00 p.m. New York City time (i) on the third Business Day
following and excluding the date the Conversion Notice is received or (ii) on
any other date upon which such Holder and the Partnership mutually agree (each,
a "CONVERSION CLOSING DATE").
9
2.5 CONDITIONS TO CLOSING.
(a) HOLDER'S CONDITIONS TO CLOSING. It shall be a condition to
each Holder's obligation to close on each Conversion Closing Date that
each of the following is satisfied, unless waived by such Holder:
(i) the Registration Statement is effective and no
stop order has been issued; and
(ii) all Series A Common Units to be issued upon such
Conversion Closing Date shall be duly listed and admitted to
trading on the Principal Securities Exchange upon issuance.
(b) THE PARTNERSHIP'S CONDITIONS TO CLOSING. It shall be a
condition to the Partnership's obligation to close that each of the
following is satisfied, unless waived by the Partnership:
(i) each Holder shall represent and warrant that
each of the following is true and correct as of the Conversion
Closing Date:
(1) the Holder is a QIB, a large
institutional accredited investor, or an insurance
company or similar institutional investor whose
business is to invest funds entrusted to Holder;
(2) the Holder is acquiring the Series A
Common Units issuable upon conversion of the Series F
Convertible Units for its own account and in the
ordinary course of its business and is not
participating in a distribution, and has no
arrangement or understanding with any Person to
participate in the distribution of the Series A
Common Units; and
(3) the Holder is not a registered "broker"
or "dealer" as such terms are defined in Section 3 of
the Exchange Act;
(ii) there is no Blackout Period in effect; provided
that the Partnership has given notice of the commencement of a
Blackout Period to each Holder pursuant to Section 9;
(iii) the Partnership shall have received from such
Holder a completed Citizenship Certification stating the
requirements of the Partnership Agreement; and
(iv) the issuance of the Series A Common Units shall
not cause the Partnership to exceed the Maximum Number.
(c) AGREEMENT TO CAUSE CONDITIONS TO BE SATISFIED. The
Partnership with respect to Section 2.5(a) and each Holder with respect
to Sections 2.5(b)(i) and (iii) shall
10
each use commercially reasonable efforts to cause each of the foregoing
conditions to be satisfied at the earliest possible date.
(d) REMEDY OF HOLDER. If the conditions set forth in Section
2.5(a) are not satisfied or waived prior to the third Business Day
following the date the Conversion Notice is received and no Blackout
Period is in effect, then such Holder's exclusive remedies will be
those remedies provided in this Section 2.5(d). Upon satisfaction of
the condition set forth in the Section 2.5(a), the Partnership shall
deliver written notice to such Holder of such satisfaction. If such
condition is not satisfied or waived prior to the second Business Day
following, and excluding, the Conversion Notice Date, then such Holder
may, at its sole option, and at any time:
(i) withdraw the Conversion Notice by written notice
to the Partnership regardless of whether such condition has
been satisfied or waived as of the withdrawal date and, after
such withdrawal, shall have no further obligations with
respect to such Conversion Notice and may submit a Conversion
Notice on any future date with respect to any remaining Series
A Common Units underlying any such Series F Convertible Units,
including those referenced in the original Conversion Notice,
or
(ii) elect not to withdraw its Conversion Notice, in
which case, if no Blackout Period is in effect, the
Partnership shall pay such Holder, in immediately available
federal funds by 5:00 p.m., New York City time, on the third
Business Day following such Holder's delivery to the
Partnership of evidence of Holder's payment of the amount
described in clause (x) below and certificate(s) representing
Series F Convertible Units (including Holder's account
information to which such payment should be sent) an amount in
cash equal to the lesser of (x) the actual cost that such
Holder paid to satisfy its obligations to tender Series A
Common Units pursuant to an underlying sales contract for
Series A Common Units less the Conversion Consideration such
Holder would have tendered on such Conversion Closing Date
(or, if the Holder discharged its obligations under such
underlying sales contract by making a cash payment, the amount
of such cash payment), and (y) the number of Series A Common
Units that such Holder would receive on such Conversion
Closing Date multiplied by the positive difference, if any,
between the Daily Market Unit Price on the relevant Conversion
Closing Date and the Conversion Unit Price in effect on the
Conversion Notice Date. If the Conversion Consideration deemed
to have been tendered pursuant to this Section 2.5(d) is less
than the remaining, unconverted portion of Series F
Convertible Units represented by the certificate(s) tendered
to the Partnership, the Partnership shall issue a replacement
certificate(s) as provided in Section 2.8(b).
In the case of clause (ii) above, such Holder shall be deemed to have
converted a number of Series F Convertible Units with respect to the
Conversion
11
Consideration designated in the relevant Conversion Notice, but shall
not be required to tender such Conversion Consideration, and the
Partnership shall be deemed to have satisfied its obligations with
respect to such Conversion Notice.
(e) EFFECT OF CLOSING. If any of the conditions contained in
this Section 2.5 are not satisfied prior to the Conversion Closing
Date, but any Holder and the Partnership consummate the transaction
contemplated by the Conversion Notice, then all unsatisfied conditions
shall be deemed to have been waived by the relevant party, and neither
any Holder nor the Partnership shall have any further rights or
remedies with respect to such unsatisfied condition, except any rights
and remedies provided under the Securities Act. Notwithstanding the
foregoing, Section 2.5(a)(ii) shall not be deemed to have been waived
by the Holder unless the Partnership shall have delivered written
notice pursuant to Section 9 of the failure to satisfy the condition
described in Section 2.5(a)(ii) at least one (1) Business Day before
the Conversion Closing Date.
2.6 WHEN CONVERSION EFFECTIVE. Each conversion under any Series F
Convertible Unit shall be deemed to have been effected on the Conversion Closing
Date upon receipt of the relevant Conversion Consideration and surrender of the
certificate(s) representing the Series F Convertible Unit(s) (or upon notation
on the Transfer Agent's registry if the Series F Convertible Units are in
book-entry form), and the Person or Persons in whose name or names any
certificate or certificates representing the Series A Common Units shall be
issuable upon such conversion as provided in Section 2.7 shall be deemed to have
become the holder(s) of record thereof.
2.7 DELIVERY OF SERIES F CONVERTIBLE UNIT AND PAYMENT. On the
Conversion Closing Date, a converting Holder shall surrender the certificate(s)
representing the Series F Convertible Unit(s) to the Partnership at the address
set forth for notices to the Partnership in Section 9 and shall deliver payment:
(a) by wire transfer to an account designated by the
Partnership on Schedule A of immediately available federal funds in the
dollar amount of the Conversion Consideration,
(b) by tender of Partnership Bonds with an aggregate principal
amount plus accrued interest equal to the dollar amount of the
Conversion Consideration (with such documentation and certificates as
reasonably requested by the Partnership), or
(c) any combination of cash and Partnership Bonds in the
dollar amount of the Conversion Consideration.
Upon the Partnership's receipt of the Conversion Consideration, subject to the
Maximum Number, a converting Holder shall be entitled to receive that number of
duly authorized, validly issued, fully paid and non-assessable Series A Common
Units upon conversion of a Series F Convertible Unit (except as such
non-assessability may be affected by the
Delaware Act) as determined pursuant to
Section 3.1.
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2.8 DELIVERY OF UNIT CERTIFICATES, ETC. On the Conversion Closing Date,
the Partnership at its expense (including payment by it of any applicable issue
taxes) shall cause to be issued in the name of and delivered to a converting
Holder or as such Holder may direct,
(a) at the election of such Holder, (1) at such address
specified by such Holder via reputable overnight courier, one or more
certificates for, or (2) via the Depository Trust Company's Deposit and
Withdrawal at Custodian (or DWAC) system the number of duly authorized,
validly issued, fully paid and non-assessable (except as such
non-assessability may be affected by the
Delaware Act) Series A Common
Units to which such Holder shall be entitled upon such conversion plus,
in lieu of any fractional unit to which such Holder would otherwise be
entitled, cash in an amount equal to the same fraction of the relevant
Conversion Unit Price for such relevant Conversion Closing Date, and
(b) if the Series F Convertible Units are certificated, in
case such conversion is in part only, at such address specified by such
Holder via reputable overnight courier, a certificate representing the
remaining, unconverted portion of the Series F Convertible Unit,
setting forth the remainder of Series F1 Conversion Consideration or
Series F2 Conversion Consideration, as applicable, for which such
Series F Convertible Unit shall be convertible (without giving effect
to any adjustment thereof) after giving effect to the Conversion
Consideration received by the Partnership, or deemed to have been
received in connection with Sections 2.2, 2.5(d) 3.3(d) and 3.3(f), or
if the Series F Convertible Units are in book-entry form, with
adjustment to the Transfer Agent's register to reflect the amount of
Conversion Consideration received by the Partnership, or deemed to have
been received in connection with Sections 2.2, 2.5(d) 3.3(d) and
3.3(f).
3. ADJUSTMENT OF UNIT PRICES AND SERIES A COMMON UNITS ISSUABLE UPON CONVERSION.
3.1 GENERAL; CONVERSION UNIT PRICE. The number of Series A Common Units
which a Holder shall be entitled to receive upon conversion of Series F
Convertible Units shall be determined by dividing the Conversion Consideration
for such conversion by the Conversion Unit Price in effect for such conversion,
all subject to the adjustments, terms and conditions in this Statement.
3.2 TREATMENT OF PARTNERSHIP INTEREST ADJUSTING EVENTS. In case the
Partnership may effect a Partnership Interest Adjusting Event, including a pro
rata distribution of Series A Common Units to all holders of Series A Common
Units, or a subdivision or combination of the outstanding Series A Common Units,
then (a) in the case of any such distribution, immediately after the close of
business on the record date for the determination of holders of any class of
securities entitled to receive such distribution, or (b) in the case of any such
subdivision or combination, at the close of business on the day immediately
prior to the day upon which such partnership action becomes effective, the
Maximum Number, the Measuring Date Unit Price, and the Conversion Unit Price,
the Prevailing Unit Price and, to the extent applicable, the Daily Market Unit
Price and other price or quantity (but excluding the Series F1 Conversion
Consideration and the
13
Series F2 Conversion Consideration) in effect immediately prior to such
Partnership Interest Adjusting Event shall be proportionately changed.
3.3 ADJUSTMENTS FOR MERGER, CONSOLIDATION, SALE OF ASSETS.
(a) If after the date of this Statement, (i) the Partnership
is acquired by means of merger, consolidation, share exchange, or other
statutory acquisition in which ninety percent (90%) or more of the
outstanding Series A Common Units are exchanged for cash, securities or
other assets, or (ii) pursuant to a tender offer in which over fifty
percent (50%) of the outstanding Series A Common Units become
beneficially owned by any Person or 13D Group, or (iii) the Partnership
sells all or substantially all of the assets of the Partnership (on a
consolidated basis) (the transactions listed in (i), (ii) and (iii)
above are referred to individually as a "BUSINESS COMBINATION") as part
of such Business Combination, (x) (1) each Series F Convertible Unit
shall immediately upon announcement by the Partnership that it has
entered into definitive agreements relating to a Business Combination
described in (i) or (iii) above or entered into a definitive agreement
to participate in or to endorse a Business Combination described in
(ii) above become convertible (pursuant to Sections 2.1(a) and 2.1(b)
regardless of whether the announcement date is on or before August 12,
2003 and regardless of whether the Series F2 Vesting Amount has been
received by the Partnership); provided that upon the earlier of the
consummation or termination of such Business Combination (if not
consummated), all Series F Convertible Units that were not otherwise
convertible pursuant to Sections 2.1(a) and 2.1(b) prior to
acceleration of the vesting requirements pursuant to this Section
3.3(a) and would not otherwise be convertible pursuant to Sections
2.1(a) and 2.1(b) shall no longer be convertible until the satisfaction
of the conditions set forth in Sections 2.1(a) and 2.1(b) as
appropriate, or (2) each Series F1 Convertible Unit shall immediately
upon announcement by a Person of its intent to effect a Business
Combination described in clause (ii) without the participation in or
the endorsement of the Partnership become convertible (pursuant to
Section 2.1(a) regardless of whether the announcement date is on or
before August 12, 2003); provided that upon the earlier of the
consummation or termination of such Business Combination (if not
consummated), all Series F1 Convertible Units that were not otherwise
convertible pursuant to Section 2.1(a) or pursuant to this Section
3.3(a) in connection with a different Business Combination prior to
acceleration of the vesting requirements pursuant to this Section
3.3(a) and would not otherwise be convertible pursuant to Section
2.1(a) or pursuant to this Section 3.3(a) in connection with a
different Business Combination shall no longer be convertible until the
satisfaction of the condition set forth in Section 2.1(a); and (y)
proper provision shall be made as follows:
(b) Between the date a Business Combination is announced and
the effective date of the Business Combination, each Holder at its sole
option shall continue to have the right to submit to the Partnership a
Conversion Notice in accordance with the terms and conditions of this
Statement. In addition, each Holder at its sole option may elect to
submit to the Partnership a special notice (a "CONTINGENT
14
CONVERSION NOTICE") to convert all or part of its unconverted Series F
Convertible Units in connection with such Business Combination; in
which case, notwithstanding the provisions of Section 2.6,:
(i) the effectiveness of such contingent conversion
shall be conditional upon the effectiveness of the Business
Combination;
(ii) such Holder shall have the right to deliver a
notice to withdraw such Contingent Conversion Notice until the
earlier of (x) the expiration of any election period (if any)
pursuant to the Business Combination and (y) the effective
date of such Business Combination; provided that if such
Business Combination is not consummated within five (5)
Business Days of the expiration of such election period, as
such may be extended, Holder shall be entitled to withdraw its
Contingent Conversion Notice up to the effective date of such
Business Combination; and
(iii) if such Contingent Conversion Notice shall not
have been withdrawn, then on the effective date of such
Business Combination, the Holder of such Series F Convertible
Units shall receive, upon payment of the Conversion
Consideration designated in the Conversion Notice or Delayed
Conversion Notice, as the case may be, the same consideration,
in the form of cash, securities or other assets (the
"ACQUISITION CONSIDERATION") per Series A Common Unit issuable
to any other holder of Series A Common Units in connection
with such Business Combination based upon the number of Series
A Common Units into which such Holder's Series F Convertible
Units would be convertible if such Holder had converted each
Series F Convertible Unit on the Business Day immediately
preceding the date on which such Business Combination occurs.
Upon receipt of the Conversion Consideration, such Holder's
Series F Convertible Units tendered for conversion pursuant to
a Conversion Notice or Contingent Conversion Notice shall be
fully converted and shall no longer permit such Holder to
convert such Series F Convertible Units into Series A Common
Units; provided, that if the Acquisition Consideration is in
the form of cash, the Holder shall not be required to tender
the relevant Conversion Consideration to convert its Series F
Convertible Units, but shall receive an amount in connection
with such Business Combination equal to the Acquisition
Consideration applicable to such Holder based on the number of
Series A Common Units into which such Holder's Series F
Convertible Units would be convertible if such Holder had
converted each Series F Convertible Unit that it owns on the
Business Day immediately preceding the date on which such
Business Combination occurs, less such Conversion
Consideration.
(c) In the case of a Business Combination under clause (i) or
(iii) of paragraph (a) above, if the Acquisition Consideration consists
solely of cash, (A) the Partnership shall not enter into an agreement
with the Acquiring Person resulting in a Business Combination unless
such agreement expressly obligates
15
the Acquiring Person to assume the Partnership's obligations under this
Section 3.3.(c) and (B) to the extent that any Series F Convertible
Unit remains unconverted upon consummation of the Business Combination,
the Holder thereof shall receive from the Partnership or the Acquiring
Person an amount in cash equal to ten percent (10%) multiplied by the
Acquisition Consideration resulting from such Business Combination to
which such Holder would have been entitled in such Business Combination
if such Holder had converted each Series F Convertible Unit held
immediately before such Business Combination (the "BUSINESS COMBINATION
CASH PAYMENT"); provided, that the Holder shall not under any
circumstances be obligated to pay any consideration to convert such
Series F Convertible Units in order to receive the cash payment
specified in this Section 3.3(c); and, provided, further, that all
Business Combination Cash Payments shall be wire transferred to such
Holder, in accordance with instructions provided, at the earliest time
that consideration is transferred to any other holder of Series A
Common Units and, at which time, such Series F Convertible Units shall
deemed to be fully converted and, accordingly, the Holder thereof shall
have no further conversion rights with respect thereto; or
(d) In the case of a Business Combination under clause (i) or
(iii) of paragraph (a) above, if the Acquisition Consideration for the
Series A Common Units is partially stock or other securities or other
non-cash assets and partially cash, then the Partnership shall not
enter into an agreement with the Acquiring Person resulting in a
Business Combination unless such agreement expressly obligates the
Acquiring Person to assume all of the Partnership's obligations under
this Section 3.3(d). (x) With respect to the Stock Portion of each
unconverted Series F Convertible Unit that would be convertible into
Acquisition Consideration in the form of stock or other non-cash assets
(the "PARTIAL STOCK ASSUMPTION AGREEMENT") the Holder thereof shall
thereafter automatically have equivalent rights with respect to the
Acquiring Person and from and after the effective date of the Business
Combination and under such Partial Stock Assumption Agreement (A) all
references to the Partnership in this Statement shall be references to
the Acquiring Person, (B) all references to Series A Common Units in
this Statement shall be references to the type of securities for which
the Series A Common Units are exchanged in the Business Combination,
(C) all references to the Measuring Date Unit Price in this Statement
shall be references to the Partial Stock Adjustment Measuring Price,
and (D) all references to the Prevailing Unit Price, Daily Market Price
and Conversion Unit Price shall be references to such prices with
respect to the Acquiring Person and (y) with respect to the Cash
Portion of each unconverted Series F Convertible Unit that would have
been converted into Acquisition Consideration in the form of cash, the
Holder thereof shall be entitled to receive from the Partnership or the
Acquiring Person an amount in cash equal to the Business Combination
Cash Payment multiplied by the Cash Portion; provided, that the Holder
shall not under any circumstances be obligated to pay any consideration
to convert any Series F Convertible Unit in order to receive the cash
payment specified in this Section 3.3(d); and, provided, further, that
all Business Combination Cash Payments shall be wire transferred to
such Holder, in accordance with instructions provided, at
16
the earliest time that consideration is transferred to any other holder
of Series A Common Units and, at which time, the Cash Portion of each
such Series F Convertible Unit shall deemed to be fully converted and,
accordingly, the Holder thereof shall have no further conversion rights
with respect thereto; or
(e) In the case of a Business Combination under clause (i) or
(iii) of paragraph (a) above, if the Acquisition Consideration for the
Series A Common Units consists solely of stock or other non-cash assets
of the Acquiring Person, then the Partnership shall not enter into an
agreement with the Acquiring Person resulting in a Business Combination
unless such agreement expressly obligates the Acquiring Person to
assume all of the Partnership's obligations under any unconverted
Series F Convertible Units (the "STOCK ASSUMPTION AGREEMENT"). In the
event that any Series F Convertible Unit remains unconverted upon
consummation of the Business Combination, the Holder thereof shall
thereafter automatically have equivalent rights with respect to the
Acquiring Person and from and after the effective date of the Business
Combination and under such Stock Assumption Agreement (A) all
references to the Partnership in this Statement shall be references to
the Acquiring Person, (B) all references to Series A Common Units in
this Statement shall be references to the securities for which the
Series A Common Units are exchanged, (C) all references to the
Measuring Date Unit Price in this Statement shall be references to the
Stock Adjustment Measuring Price, and (D) all references to the
Prevailing Unit Price, Daily Market Price and Conversion Unit Price
shall be references to such prices with respect to the Acquiring
Person.
(f) In the case of a Business Combination under clause (ii) of
paragraph (a) above, if any Series F Convertible Unit remains
unconverted upon consummation of the Business Combination, the Holder
shall thereafter be entitled, at its election, to receive from the
Partnership an amount in cash equal to ten percent (10%) of the product
of (x) the number of Series A Common Units into which such Holder's
Series F Convertible Units would be convertible if such Holder had
converted each Series F Convertible Unit, on the Business Day
immediately preceding the date such Business Combination occurs, and
(y) the weighted-average price paid per Series A Common Unit (following
the announcement of such Business Combination by the Acquiring Person)
by the Acquiring Person in connection with such Business Combination;
provided that Holder shall be entitled to make such election under this
Section 3.3(f) only once and prior to the expiration of the election
period applicable to such Business Combination; provided further, that
if the election period for such Business Combination is extended or if
such Business Combination is not consummated within five (5) Business
Days of the expiration of such election period, Holder shall be
entitled to withdraw such election up to the effective date of such
Business Combination (which shall be deemed to be the date on which the
Acquiring Person accepts for purchase fifty percent (50%) or more of
the outstanding Series A Common Units). All cash payments under this
Section 3.3(f) shall be made by wire transfer of immediately available
funds to the relevant Holder, in accordance with instructions provided
by such Holder no later than the second (2nd) Business Day
17
following the consummation of such Business Combination. Upon receipt
of such payment, such Holder's Series F Convertible Units shall be
deemed to have been fully converted and shall no longer permit such
Holder to convert such Series F Convertible Units into Series A Common
Units; provided, that unless and until such Holder elects to receive
the cash payment set forth in this Section 3.3(f) with respect to each
Series F Convertible Unit that such Holder holds, such Series F
Convertible Unit shall remain outstanding and may be converted in the
manner set forth in Section 2.1.
3.4 NO PROHIBITION FROM ISSUING SERIES A COMMON UNITS. Notwithstanding
anything contained in this Statement to the contrary, nothing in this Statement
shall prohibit the Partnership from issuing Series A Common Units to any Person,
regardless of whether or not such issuance would result in an adjustment under
this Section 3.
4. NATURE AND RIGHTS OF SERIES F CONVERTIBLE UNIT.
4.1 NON-VOTING. The Series F Convertible Units shall be non-voting on
all matters and no Holder thereof shall be entitled to vote, separately or with
all or any series, class or group of Limited Partners, the Series F Convertible
Units with respect to any matter (except as set forth in the proviso to this
Section 4.1) on which holders of the Series A Common Units are entitled to vote,
including, without limitation, mergers, acquisitions, sales of all or
substantially all of the Partnership's assets, and similar transactions;
provided, that the Partnership shall not, without the affirmative consent of the
Holders having a majority-in-interest (based on the unconverted Series F1
Conversion Consideration prior to the vesting of the Series F2 Convertible
Units, and on all unconverted Series F Convertible Units after the Series F2
Convertible Units are convertible) as of the date of determination, (i) alter or
change the rights, powers or limitations of the Series F Convertible Unit
including, without limitation, any changes to the certificate representing the
Series F Convertible Unit or the Partnership Agreement that limit any Holder's
ability to convert the Series F Convertible Unit under this Statement or affect
the enforceability of any Holder's rights under this Statement, (ii) authorize
or issue additional Series F Convertible Units or (iii) effect any split or
combination of the Series F Convertible Units.
4.2 NO ALLOCATIONS. The Partnership shall not maintain a capital
account for any Holder of Series F Convertible Units. Accordingly, the
Partnership shall not make any allocations to any Series F Convertible Unit of
income, gains, losses or deductions.
4.3 NO DISTRIBUTIONS. The Series F Convertible Units shall not be
entitled to receive any distributions, whether regular, special, liquidating or
otherwise, of cash, or other assets or securities, but shall be entitled to the
adjustments set forth in Section 3.2.
5. REGISTRATION STATEMENT AND BLACKOUT PERIODS.
5.1 The Partnership shall:
18
(a) subject to the Partnership's ability to amend or
supplement the Registration Statement or the Prospectus, use its
commercially reasonable efforts to keep the Registration Statement
effective until the Termination Time;
(b) prepare and file with the SEC such amendments and
supplements to the Registration Statement and the Prospectus as may be
necessary to comply with the provisions of the Securities Act with
respect to the issuance of Series A Common Units upon conversion of the
Series F Convertible Units;
(c) cause all Series A Common Units to be listed on each
securities exchange and quoted on each quotation service on which
similar securities issued by the Partnership are then listed or quoted;
(d) provide a transfer agent and registrar for all Series A
Common Units and a CUSIP number for all Series A Common Units; and
(e) at all times reserve for issuance pursuant to the
Registration Statement such number of its Series A Common Units as
shall from time to time be sufficient to effect the conversion of all
the Series F Convertible Units then outstanding and to satisfy its
delivery obligations upon such conversion.
5.2 At any time prior to the Termination Time, the Partnership may,
without any liability to the Partnership and upon notice to each Holder pursuant
to Section 9, suspend each Holder's rights to convert pursuant to the
Registration Statement upon the occurrence of any of the following (each, a
"BLACKOUT PERIOD"):
(a) a request by the SEC for amendments or supplements to the
Registration Statement or the prospectus included therein for
additional information;
(b) the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose;
(c) the filing of any post-effective amendments or supplements
to the Registration Statement or the prospectus included therein that
the Partnership deems necessary or appropriate to maintain or utilize
for any purpose the Registration Statement or the prospectus included
therein;
(d) the happening of any event that requires the Partnership
to make changes to the Registration Statement or the prospectus
included therein in order that the Registration Statement or the
prospectus do not contain an untrue statement of a material fact nor
omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the
prospectus, in light of the circumstances under which they were made)
not misleading; and
(e) the Partnership shall deliver to the Holder a certificate
signed by any of its Chief Executive Officer, Chief Operating Officer,
Chief Financial Officer, General Counsel or Vice President that the
Board of Directors of the General Partner has made the determination in
good faith and using reasonable judgment
19
that disclosure of information sufficient to ensure that the
Registration Statement and related prospectus contain no misstatement
or omission would be premature, could be reasonably expected to be
significantly and materially disadvantageous to the Partnership's
financial condition, or could be reasonably expected to be injurious to
the consummation of any material transaction.
If any of the above conditions or events should occur, the Partnership shall
immediately give the Holders written notice that a Blackout Period is in effect;
provided that the failure of the Partnership to tender notice of the occurrence
of any of the above shall not give rise to any liability in excess of an amount
described in Section 5.5.
5.3 Upon the commencement a Blackout Period, the Partnership shall:
(a) with respect to any notice pursuant to paragraph (b) of
Section 5.2, use commercially reasonable efforts to obtain the
withdrawal at the earliest possible time of any order suspending the
effectiveness of the Registration Statement;
(b) with respect to any notice pursuant to paragraphs (a) or
(c) of Section 5.2, as promptly as practical prepare and file a
post-effective amendment to the Registration Statement or an amendment
or supplement to the prospectus included therein and any other required
document so that, as thereafter delivered to Holder upon conversion of
the Series F Convertible Unit, the Prospectus will not contain an
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; or
(c) with respect to any notice pursuant to paragraphs (d) or
(e) of Section 5.2, use commercially reasonable efforts to amend such
Registration Statement and/or amend or supplement the prospectus
included therein if necessary and to take all other actions necessary
to allow the issuance of registered Series A Common Units to take place
as promptly as possible, subject, however, to the right of the
Partnership in its sole discretion to determine whether to delay
further conversion of the Series F Convertible Unit pursuant to the
Registration Statement until the conditions or circumstances referred
to in the notice have ceased to exist or have been disclosed.
5.4 Upon receipt of notice by the Partnership in accordance with
Section 5.1 above that a Blackout Period exists, the Series F Convertible Unit
shall immediately become unconvertible until each Holder receives notice from
the Partnership that the Blackout Period has ended. Notwithstanding the
foregoing, at any time during a Blackout Period, each Holder may:
(a) tender a Conversion Notice providing for a Conversion
Closing Date delayed to a date that is three Business Days after the
termination of the relevant Blackout Period (a "DELAYED CLOSING
CONVERSION NOTICE"); each such Delayed Closing Conversion Notice shall
have the effect of preserving the Conversion Unit Price, Prevailing
Unit Price, and Daily Market Unit Price that was in effect
20
as of the date of such Delayed Closing Conversion Notice, each subject
to adjustment pursuant to Sections 3 and 5.5; provided, that such
Holder may withdraw at any time a Delayed Closing Conversion Notice
prior to the relevant delayed Conversion Closing Date; or
(b) tender a Conversion Notice requesting the delivery on the
Conversion Closing Date of Series A Common Unit that have not been
registered pursuant to the Registration Statement, so long as (i) the
offer, sale and issuance of the Series A Common Units shall be exempt
from the registration requirements of the Securities Act and shall have
been registered or qualified (or exempt from registration or
qualification) under the registration, permit or qualification
requirements of all applicable state securities laws, and (ii) such
Holder delivers to the Partnership an opinion from counsel of national
repute reasonably satisfactory in the Partnership's sole discretion to
such effect. Any certificate(s) representing unregistered Series A
Common Units shall be stamped or otherwise imprinted with a legend in
the following form (in addition to any legend required under applicable
state securities laws):
"THE SERIES A COMMON UNITS REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT") OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT AND APPLICABLE STATE SECURITIES LAWS, OR UNLESS
AN EXEMPTION FROM REGISTRATION IS AVAILABLE AND AN
OPINION OF COUNSEL, REASONABLY SATISFACTORY TO
GULFTERRA ENERGY PARTNERS, L.P., SHALL HAVE BEEN
FURNISHED TO GULFTERRA ENERGY PARTNERS, L.P."
The Partnership shall promptly (a) notify each Holder upon the end of a Blackout
Period, and (b) deliver copies of amendments or supplements, if any, to the
Registration Statement or the Prospectus.
5.5 The Partnership shall be entitled to exercise its rights to suspend
conversion of the Series F Convertible Units as provided in this Section 5 (A)
twice in any 12 month period, (B) each such period during which conversion may
be suspended at any time shall not exceed 30 days, and (C) no Blackout Period
may commence less than 30 days after the end of the preceding Blackout Period;
provided, that if any Blackout Period exceeds the duration or frequency limits
set forth in clauses (A) and (B) above (a "BLACKOUT VIOLATION"), then the
Conversion Unit Price for all unconverted Series F Convertible Units shall be
permanently reduced by one and one-half percent (1 1/2%) for each month (or
portion thereof) that a Blackout Violation exists. Other than the reduction to
the
21
Conversion Unit Price as described in this Section 5.5, the Partnership shall
incur no liability to any Holder in connection with any Blackout Period or
Blackout Violation; provided that notwithstanding the foregoing, the Partnership
agrees that the provisions of this Section 5 shall be specifically enforceable.
5.6 If a Blackout Period exists for at least four (4) months, the
Holders having a majority-in-interest (based on the unconverted Series F1
Conversion Consideration prior to the vesting of the Series F2 Convertible
Units, and on all unconverted Series F Convertible Units after the Series F2
Convertible Units are convertible) as of the date of determination shall be
entitled to demand that, to the extent required by the securities laws to permit
the issuance of Series A Common Units pursuant to Section 5.4(b), the
Partnership withdraw the Registration Statement for a period necessary to
effectuate a private placement of the Series A Common Units issuable upon
conversion of all or part of the Series F Convertible Units. If so demanded, the
Partnership shall withdraw the Registration Statement within 5 Business Days of
its receipt of such written demand. Within 60 days of the Partnership's receipt
of the written demand of the Holders having a majority-in-interest (based on the
unconverted Series F1 Conversion Consideration prior to the vesting of the
Series F2 Convertible Units, and on all unconverted Series F Convertible Units
after the Series F2 Convertible Units are convertible) as of the date of
determination, the Partnership shall prepare and file a replacement registration
statement pursuant to which the Series F Convertible Units can be converted and
shall thereafter use its commercially reasonable efforts to cause such
registration statement to be declared effective as promptly as practicable.
Promptly after the issuance of unregistered Series A Common Units, and at its
own expense, the Partnership shall file a registration statement under the
Securities Act covering the resale of all of the Series A Common Units issued
pursuant to the private placement exemption, and shall use commercially
reasonable efforts to cause such registration statement to be declared
effective; provided, that nothing in this Section 5.6 shall prevent the
Partnership from filing a registration statement prior to be requested to do so
by any Holders. Upon the withdrawal of the Registration Statement, the
percentage described in Section 5.5 shall be reduced to 1% for each month (or
portion thereof without duplication for any portion of a month prior to the
withdrawal of the Registration Statement) that a Blackout Violation exists after
the date on which the Partnership withdraws the Registration Statement.
6. TRANSFERABILITY.
6.1 TRANSFERS OF SERIES F CONVERTIBLE UNITS. The Series F Convertible
Units shall not be sold, transferred or otherwise disposed of without the prior
written consent of the Partnership, which consent shall be within the sole
discretion of the Partnership. Sales, transfers or other dispositions of Series
F Convertible Units shall be in increments of one whole unit, and not fractions
thereof. The provisions applicable to the Series F Convertible Units shall bind
and inure to the benefit of and be enforceable by the Partnership, the
respective successors of the Partnership, and by any Holder of Series F
Convertible Units.
6.2 PAYMENT OF TAX UPON ISSUE OF TRANSFER. The Partnership shall pay
all documentary stamp taxes (if any) attributable to the issuance of Series A
Common Units
22
upon the conversion of the Series F Convertible Unit; provided, however, that
the Partnership shall not be required to pay any tax or taxes which may be
payable in respect of any transfer involved in the registration of any
certificates for Series A Common Units in a name other than that of a Holder
upon the conversion of Series F Convertible Units, and the Partnership shall not
be required to issue or deliver the Series F Convertible Units or certificates
for Series A Common Units unless or until the person or persons requesting the
issuance thereof shall have paid to the Partnership the amount of such tax or
shall have established to the reasonable satisfaction of the Partnership that
such tax has been paid.
7. DENIAL OF PREEMPTIVE RIGHTS AND DISSENTERS' RIGHTS. The Series F
Convertible Units are not entitled to any preemptive or subscription right in
respect of any securities of the Partnership, and do not have dissenters' rights
of appraisal.
8. TRANSFER AGENT. Initially, the Partnership (and upon a Business
Combination, the Acquiring Person) shall serve as the transfer agent (the
"TRANSFER AGENT") for the Series F Convertible Units. The Transfer Agent shall
at all times maintain a register (the "UNIT REGISTER") of the Holders of the
Series F Convertible Units. The Partnership may deem and treat each Holder of
Series F Convertible Units as set forth in the Unit Register as the true and
lawful owner thereof for all purposes, and the Partnership shall not be affected
by any notice to the contrary.
The Partnership may, at any time and from time to time, appoint another
Person to serve as the Transfer Agent, and shall upon acceptance by such Person,
give notice to each Holder of the change in Transfer Agent. Such new Transfer
Agent shall be a (i) Person doing business and in good standing under the laws
of the United States or any state thereof, and having a combined capital and
surplus of not less than $50,000,000 or (ii) an affiliate of such a Person. The
combined capital and surplus of any such new Transfer Agent shall be deemed to
be the combined capital and surplus as set forth in the most recent report of
its condition published by such Transfer Agent prior to its appointment;
provided that such reports are published at least annually pursuant to law or to
the requirements of a federal or state supervising or examining authority. After
acceptance in writing of such appointment by the new Transfer Agent, it shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named herein as the Transfer Agent, without any further
assurance, conveyance, act or deed; but if for any reason it shall be reasonably
necessary or expedient to execute and deliver any further assurance, conveyance,
act or deed, the same shall be done at the expense of the Partnership and shall
be legally and validly executed and delivered by the Partnership. Any Person
into which any new Transfer Agent may be merged or any corporation resulting
from any consolidation to which any new Transfer Agent shall be a party or any
corporation to which any new Transfer Agent transfers substantially all of its
corporate trust or shareholders services business shall be a successor Transfer
Agent under this Transfer without any further act; provided that such Person (i)
would be eligible for appointment as successor to the Transfer Agent under the
provisions of this Section 8 or (ii) is a wholly owned subsidiary of the
Transfer Agent. Any such successor Transfer Agent shall promptly cause notice of
its succession as Transfer Agent to be delivered via reputable overnight courier
to the Holders of the Series F Convertible Units at such Holder's last address
as shown on the Unit Register.
23
9. NOTICES. All notices and other communications under this Statement
shall be in writing and shall be delivered by a nationally recognized overnight
courier, postage prepaid, addressed as provided below:
(i) If to the Partnership:
GulfTerra Energy Partners, L.P.
▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
El Paso Corporation
Attn: ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
Akin Gump ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP
Attn: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to a Holder, at the address of such Holder as listed
in the Unit Register, or to such other address as the Holder shall have
designated by notice similarly given to the Transfer Agent.
Any such notice or communication shall be deemed received (i) when made, if by
hand delivery, and upon confirmation of receipt, if made by facsimile, and in
each case if such notice is received on or before 11:59 p.m. New York City time
(except with respect to a Conversion Notice, in which case such notice must be
received on or before 3:59 p.m. New York City time), otherwise, such notice
shall be deemed to be received the following Business Day (ii) one Business Day
after being deposited with a next-day courier, return receipt requested, postage
prepaid or (iii) three Business Days after being sent certified or registered
mail, return receipt requested, postage prepaid, in each case addressed as above
(or to such other addresses as the Partnership or each Holder may designate in
writing from time to time).
10. CONSTRUCTION. Headings or other titles used in this Statement are
for convenience only and neither limit nor amplify the provisions of this
Statement, and all references herein to sections or subdivisions thereof will
refer to the corresponding section or subdivision thereof of
24
this Statement unless specific reference is made to such sections or
subdivisions of another document or instrument. Unless the context of this
Statement clearly requires otherwise, the words "include," "includes" and
"including" will be deemed to be followed by the words "without limitation," and
the words "hereof," "herein," "hereunder" and similar terms in this Statement
will refer to this Statement as a whole and not any particular section or
article in which such words appear. Whenever the context may require, any
pronoun used in this Statement 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. References in this Statement to any
party shall include such party's successor. The word "shall" means will and vice
versa.
11. SEVERABILITY OF PROVISIONS. If any right, preference, or limitation
of the Series F Convertible Units set forth in this Statement (as such Statement
may be amended from time to time) is invalid, unlawful, or incapable of being
enforced by reason of any rule of law or public policy, all other rights,
preferences, and limitations set forth in this Statement (as so amended) which
can be given effect without the invalid, unlawful or unenforceable right,
preference, or limitation will, nevertheless, remain in full force and effect,
and no right, preference, or limitation set forth in this Statement shall be
deemed dependent upon any other such right, preference, or limitation unless so
expressed in this Statement.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
25
EXHIBIT A
CERTIFICATE REPRESENTING SERIES F CONVERTIBLE UNIT
[SEE ATTACHED]
A-1
(GULFTERRA ENERGY PARTNERS LOGO) [__] Series F1 Convertible Units
Entitling the Holder to Purchase
CERTIFICATE EVIDENCING SERIES F1 CONVERTIBLE UNITS Up To An Aggregate of
REPRESENTING LIMITED PARTNER INTERESTS $[1],000,000 of
Series A Common Units
GULFTERRA ENERGY PARTNERS, L.P. prior to the Series F1 Termination Time
(A LIMITED PARTNERSHIP FORMED UNDER THE LAWS OF
DELAWARE)
No. [__]
GULFTERRA ENERGY COMPANY, L.L.C., a
Delaware limited liability company,
as the General Partner of GULFTERRA ENERGY PARTNERS, L.P., a
Delaware Limited
partnership (the "Partnership"), hereby certifies that [name of holder] (the
"Holder") is the registered owner of [__] Series F1 Convertible Units
representing limited partner interests in the Partnership (the "Series F1
Convertible Units") transferable on the books of the Partnership, in person or
by duly authorized attorney, upon surrender of this Certificate properly
endorsed and accompanied by a properly executed application for transfer of the
Series F1 Convertible Units represented by this Certificate. The rights,
preferences and limitations of the Series F1 Convertible Units are set forth in,
and this Certificate and the Series F1 Convertible Units represented hereby are
issued and shall in all respects be subject to the terms and provisions of, the
Second Amended and Restated Agreement of Limited Partnership of GulfTerra Energy
Partners, L.P., as amended, supplemented or restated from time to time (the
"Partnership Agreement"). Copies of the Partnership Agreement are on file at,
and will be furnished without charge on delivery of written request to the
Partnership at the principal office of the Partnership located at ▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇. Capitalized terms used in this Certificate
but not defined shall have the meanings given them in the Partnership Agreement.
The Holder, by accepting this Certificate, is deemed to have (a)
requested admission as, and agreed to become, a Limited Partner or a Substituted
Limited Partner, as applicable, and to have agreed to comply with and be bound
by and to have executed the Partnership Agreement, (b) represented and warranted
that the Holder has all right, power and authority and, if an individual, the
capacity necessary to enter into the Partnership Agreement, (c) appointed the
General Partner and, if a Liquidator shall be appointed, the Liquidator of the
Partnership as the Holder's attorney to execute, swear to, acknowledge and file
any document, including, without limitation, the Partnership Agreement and any
amendment thereto and the Certificate of Limited Partnership of the Partnership
and any amendment thereto, necessary or appropriate for the Holder's admission
as a Limited Partner or a Substituted Limited Partner, as applicable, in the
Partnership and as a party to the Partnership Agreement, (d) given the powers of
attorney provided for in the Partnership Agreement, (e) made the waivers and
given the consents and approvals contained in the Partnership Agreement and (f)
certified to the Partnership that the Holder (including, to the best of the
Holder's knowledge, any person for whom the Holder holds the Common Units) is an
Eligible Citizen.
GULFTERRA ENERGY COMPANY, L.L.C.
General Partner
DATE: May _____, 2003
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Corporate Secretary
THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED BY THE TERMS OF THE STATEMENT OF RIGHTS, PRIVILEGES AND
LIMITATIONS OF SERIES F CONVERTIBLE UNITS (THE "STATEMENT"), WHICH IS
ATTACHED AS ANNEX A TO THE THIRD AMENDMENT TO THE SECOND AMENDED AND
RESTATED PARTNERSHIP AGREEMENT OF GULFTERRA ENERGY PARTNERS, L.P. AND
THE UNITHOLDER AGREEMENT, BY AND BETWEEN GULFTERRA ENERGY PARTNERS,
L.P. AND ▇▇▇▇▇▇▇▇ INTERNATIONAL, INC. (THE "UNITHOLDER AGREEMENT"). YOU
MAY OBTAIN COPIES OF THE STATEMENT AND UNITHOLDER AGREEMENT FROM
GULFTERRA ENERGY PARTNERS, L.P.
----------
IMPORTANT NOTICE REGARDING INVESTOR RESPONSIBILITIES
DUE TO TAX SHELTER STATUS OF GULFTERRA ENERGY PARTNERS, LP.
You have acquired an interest in GulfTerra Energy Partners, L.P., ▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, whose taxpayer identification number
is ▇▇-▇▇▇▇▇▇▇. The Internal Revenue Service has issued GulfTerra Energy
Partners, L.P. the following tax shelter registration number: 93084000079. If
there is no number in the blank in the preceding sentence, the number will be
furnished to the Holder when it is received.
YOU MUST REPORT THIS REGISTRATION NUMBER TO THE INTERNAL REVENUE
SERVICE IF YOU CLAIM ANY DEDUCTION, LOSS, CREDIT, OR OTHER TAX BENEFIT OR REPORT
ANY INCOME BY REASON OF YOUR INVESTMENT IN GULFTERRA ENERGY PARTNERS, L.P.
You must report the registration number as well as the name and
taxpayer identification number of GulfTerra Energy Partners, L.P. on Internal
Revenue Code Form 8271. FORM 8271 MUST BE ATTACHED TO THE RETURN ON WHICH YOU
CLAIM THE DEDUCTION, LOSS, CREDIT, OR OTHER TAX BENEFIT OR REPORT ANY INCOME BY
REASON OF YOUR INVESTMENT IN GULFTERRA ENERGY PARTNERS, L.P.
If you transfer your interest in GulfTerra Energy Partners, L.P. to
another person, you are required by the Internal Revenue Service to keep a list
containing (a) that person's name, address and taxpayer identification number,
(b) the date on which you transferred the interest and (c) the name, address and
tax shelter registration number of GulfTerra Energy Partners, L.P. If you do not
want to keep such a list, you must (1) send the information specified above to
the General Partner, who will keep the list for this tax shelter and (2) give a
copy of this notice to the person to whom you transfer your interest Your
failure to comply with any of the above-described responsibilities could result
in the imposition of a penalty under Section 6707(b) or 6708(a) of the Internal
Revenue Service Code of 1986, as amended, unless such failure is shown to be due
to reasonable cause.
No assignment or transfer of the Series F1 Convertible Units evidenced
hereby will be registered on the books of GulfTerra Energy Partners, L.P. unless
the Certificate evidencing the Series F1 Convertible Units to be transferred is
surrendered for registration or transfer and an Application for Transfer of
Series F1 Convertible Units (a "Transfer Application") has been executed by a
transferee on a separate application that the Partnership will furnish on
request without charge. A transferor of the Series F1 Convertible Units shall
have no duty to the transferee with respect to execution of the Transfer
Application in order for such transferee to obtain registration of the transfer
of the Series F1 Convertible Units.
(GULFTERRA ENERGY PARTNERS LOGO) [__] Series F2 Convertible Units
Entitling the Holder to Purchase
CERTIFICATE EVIDENCING SERIES F2 CONVERTIBLE UNITS Up To An Aggregate of
REPRESENTING LIMITED PARTNER INTERESTS $[1],000,000 of
Series A Common Units
GULFTERRA ENERGY PARTNERS, L.P. prior to the Series F2 Termination Time
(A LIMITED PARTNERSHIP FORMED UNDER THE LAWS OF DELAWARE)
No. [__]
GULFTERRA ENERGY COMPANY, L.L.C., a Delaware limited liability company,
as the General Partner of GULFTERRA ENERGY PARTNERS, L.P., a Delaware Limited
partnership (the "Partnership"), hereby certifies that [name of holder] (the
"Holder") is the registered owner of [__] Series F2 Convertible Units
representing limited partner interests in the Partnership (the "Series F2
Convertible Units") transferable on the books of the Partnership, in person or
by duly authorized attorney, upon surrender of this Certificate properly
endorsed and accompanied by a properly executed application for transfer of the
Series F2 Convertible Units represented by this Certificate. The rights,
preferences and limitations of the Series F2 Convertible Units are set forth in,
and this Certificate and the Series F2 Convertible Units represented hereby are
issued and shall in all respects be subject to the terms and provisions of, the
Second Amended and Restated Agreement of Limited Partnership of GulfTerra Energy
Partners, L.P., as amended, supplemented or restated from time to time (the
"Partnership Agreement"). Copies of the Partnership Agreement are on file at,
and will be furnished without charge on delivery of written request to the
Partnership at the principal office of the Partnership located at ▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇. Capitalized terms used in this Certificate
but not defined shall have the meanings given them in the Partnership Agreement.
The Holder, by accepting this Certificate, is deemed to have (a)
requested admission as, and agreed to become, a Limited Partner or a Substituted
Limited Partner, as applicable, and to have agreed to comply with and be bound
by and to have executed the Partnership Agreement, (b) represented and warranted
that the Holder has all right, power and authority and, if an individual, the
capacity necessary to enter into the Partnership Agreement, (c) appointed the
General Partner and, if a Liquidator shall be appointed, the Liquidator of the
Partnership as the Holder's attorney to execute, swear to, acknowledge and file
any document, including, without limitation, the Partnership Agreement and any
amendment thereto and the Certificate of Limited Partnership of the Partnership
and any amendment thereto, necessary or appropriate for the Holder's admission
as a Limited Partner or a Substituted Limited Partner, as applicable, in the
Partnership and as a party to the Partnership Agreement, (d) given the powers of
attorney provided for in the Partnership Agreement, (e) made the waivers and
given the consents and approvals contained in the Partnership Agreement and (f)
certified to the Partnership that the Holder (including, to the best of the
Holder's knowledge, any person for whom the Holder holds the Common Units) is an
Eligible Citizen.
GULFTERRA ENERGY COMPANY, L.L.C.
General Partner
DATE: May _____, 2003
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Corporate Secretary
THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED BY THE TERMS OF THE STATEMENT OF RIGHTS, PRIVILEGES AND
LIMITATIONS OF SERIES F CONVERTIBLE UNITS (THE "STATEMENT"), WHICH IS
ATTACHED AS ANNEX A TO THE THIRD AMENDMENT TO THE SECOND AMENDED AND
RESTATED PARTNERSHIP AGREEMENT OF GULFTERRA ENERGY PARTNERS, L.P. AND
THE UNITHOLDER AGREEMENT, BY AND BETWEEN GULFTERRA ENERGY PARTNERS,
L.P. AND ▇▇▇▇▇▇▇▇ INTERNATIONAL, INC. (THE "UNITHOLDER AGREEMENT"). YOU
MAY OBTAIN COPIES OF THE STATEMENT AND UNITHOLDER AGREEMENT FROM
GULFTERRA ENERGY PARTNERS, L.P.
----------
IMPORTANT NOTICE REGARDING INVESTOR RESPONSIBILITIES
DUE TO TAX SHELTER STATUS OF GULFTERRA ENERGY PARTNERS, LP.
You have acquired an interest in GulfTerra Energy Partners, L.P., ▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, whose taxpayer identification number
is ▇▇-▇▇▇▇▇▇▇. The Internal Revenue Service has issued GulfTerra Energy
Partners, L.P. the following tax shelter registration number: 93084000079. If
there is no number in the blank in the preceding sentence, the number will be
furnished to the Holder when it is received.
YOU MUST REPORT THIS REGISTRATION NUMBER TO THE INTERNAL REVENUE
SERVICE IF YOU CLAIM ANY DEDUCTION, LOSS, CREDIT, OR OTHER TAX BENEFIT OR REPORT
ANY INCOME BY REASON OF YOUR INVESTMENT IN GULFTERRA ENERGY PARTNERS, L.P.
You must report the registration number as well as the name and
taxpayer identification number of GulfTerra Energy Partners, L.P. on Internal
Revenue Code Form 8271. FORM 8271 MUST BE ATTACHED TO THE RETURN ON WHICH YOU
CLAIM THE DEDUCTION, LOSS, CREDIT, OR OTHER TAX BENEFIT OR REPORT ANY INCOME BY
REASON OF YOUR INVESTMENT IN GULFTERRA ENERGY PARTNERS, L.P.
If you transfer your interest in GulfTerra Energy Partners, L.P. to
another person, you are required by the Internal Revenue Service to keep a list
containing (a) that person's name, address and taxpayer identification number,
(b) the date on which you transferred the interest and (c) the name, address and
tax shelter registration number of GulfTerra Energy Partners, L.P. If you do not
want to keep such a list, you must (1) send the information specified above to
the General Partner, who will keep the list for this tax shelter and (2) give a
copy of this notice to the person to whom you transfer your interest Your
failure to comply with any of the above-described responsibilities could result
in the imposition of a penalty under Section 6707(b) or 6708(a) of the Internal
Revenue Service Code of 1986, as amended, unless such failure is shown to be due
to reasonable cause.
No assignment or transfer of the Series F2 Convertible Units evidenced
hereby will be registered on the books of GulfTerra Energy Partners, L.P. unless
the Certificate evidencing the Series F2 Convertible Units to be transferred is
surrendered for registration or transfer and an Application for Transfer of
Series F2 Convertible Units (a "Transfer Application") has been executed by a
transferee on a separate application that the Partnership will furnish on
request without charge. A transferor of the Series F2 Convertible Units shall
have no duty to the transferee with respect to execution of the Transfer
Application in order for such transferee to obtain registration of the transfer
of the Series F2 Convertible Units.
EXHIBIT B
FORM OF CONVERSION NOTICE
(To Be Executed Upon Conversion of the Series F Convertible Unit)
[DATE]
GulfTerra Energy Partners, L.P.
▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Re: Statement of Rights, Privileges and Limitations Series F
Convertible Unit ("STATEMENT")
Ladies and Gentlemen:
Pursuant to the terms and conditions contained in the Statement,
[HOLDER] hereby elects to convert $[__________]1 of Series F2 Convertible Units
into [ ] Series A Common Units, which would be purchased at a Conversion Unit
Price of $[____], and shall deliver on the Conversion Closing Date [SUCH AMOUNT
VIA WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS] [THAT NUMBER OF PARTNERSHIP
BONDS WITH AN AGGREGATE PRINCIPAL AMOUNT PLUS ACCRUED INTEREST EQUAL TO SUCH
DOLLAR AMOUNT] as payment for such Series A Common Units in accordance with the
terms of the Statement. All undefined capitalized terms used in this Conversion
Notice shall have the meaning set forth in the Statement.
In accordance with the terms of the Statement, the undersigned requests
that certificates for such units be registered in the name of and delivered to
the undersigned at the following address:
[TO BE ADDED]
Any cash in lieu of fractional shares should be sent to:
[INSERT ACCOUNT INFORMATION OR ADDRESS INFORMATION]
The undersigned shall deliver the original of the certificate(s)
representing the Series F Convertible Units no later than the second Business
Day after and excluding the date of this notice as well as each document
required to be delivered on the Conversion Closing Date by the Statement.
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(1) Insert the dollar amount of Series F Convertible Units being
converted. In the case of partial conversion, a new certificate representing the
Series F Convertible Unit shall be issued and delivered, representing the
unconverted portion of the Series F Convertible Unit.
(2) Indicate whether Series F1 or Series F2 is being tendered.
B-1
[IF THE EXERCISED AMOUNT IS NOT IN INCREMENTS OF $1,000,000, INSERT THE
FOLLOWING: THE UNDERSIGNED REQUESTS THAT A NEW CERTIFICATE SUBSTANTIALLY
IDENTICAL TO THE ATTACHED SERIES F CONVERTIBLE UNIT BE ISSUED TO THE UNDERSIGNED
EVIDENCING THE RIGHT TO PURCHASE THE DOLLAR AMOUNT OF SERIES A COMMON UNITS
EQUAL TO (x) THE SERIES F1/SERIES F2 CONVERSION CONSIDERATION LESS (y) THE
TENDERED CONVERSION CONSIDERATION.]
[HOLDER]
By:
----------------------------------
Name:
Title:
Agreed to and Acknowledged as of
[INSERT DATE].
GULFTERRA ENERGY PARTNERS, L.P.
By:
--------------------------------
Name:
Title:
B-2